What A Difference A Year Makes

Erik Broekhuizen

JUL 31 2020: The pandemic has changed Suezmax flows and volumes
In this Weekly Tanker Opinion we want to compare the developments in the Suezmax market in the first half of 2020 (January-June) with the same period one year ago and highlight some of the differences. The first six months of 2019 were not particularly strong for the Suezmax market. After a seasonally strong winter market, rates were disappointing at the end of Q1 and in Q2 of 2019. TCE’s for Suezmaxes in the Atlantic Basin averaged around $13,500/day for the first half of the year, while earnings in the Pacific were slightly over $15,000/day. In contrast to 2019, this year’s earnings have been very strong with averages of $52,250/day for West Africa – Europe trips and $51,800/day for voyages from the Arabian Gulf to Singapore. The boom in rates in 2020 was caused by temporary factors, some dislocations and significant floating storage demand. The impact of Covid-19 is starting to hit the markets hard and current rates for Suezmaxes are very similar to those at the same time last year. Looking ahead, it seems that oil demand and, as a consequence, tanker demand, will continue to struggle for at least the next three to six months as the global spread of Covid-19 remains stubbornly high.

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