This Time it is Different

July 29, 2022

Asset prices are on the rise, flashbacks to 2004-2008?

Tanker asset prices have been on a tear lately. VLCC newbuilding prices have increased from $88.4 million in January 2021, to $119 million this month, an increase of 35%.  Secondhand prices have shown a similar trend.  Over the same time period, prices for 5-year-old VLCCs are up 23% and 10-year-old VLCCs 31%.  The price developments in the other tanker segments, from Suezmaxes down to MRs mostly mirror those of the VLCCs.

The last time asset prices increased like that was during the tanker “supercycle” from 2004-2008.  As they say: “History doesn’t repeat itself, but it rhymes.” So, are there any similarities between now and then?  Can we draw any conclusions from what happened then and apply them to today’s market?

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