- There's seems to be no stopping a surge in oil tanker rates which has given owners of the vessels such as Frontline (FRO +2.6%) and Euronav (EURN +1%) one of their biggest boosts in years.
- Daily rates for very large crude carriers to ship oil to China from the Persian Gulf soared 90% to more than $300K/day at the end of last week, after earning $25K/day just a month ago, Bloomberg reports, citing data from the Baltic Exchange in London.
- Rates have rallied so high that a secondhand supertanker could theoretically pay for itself in a couple of voyages, rather than the normal payback period of roughly a decade, according to estimates from Clarkson Platou Securities.
- "At current rates, owners could pay back a 10-year-old VLCC, valued at $47M including scrap value of $16M, after only two trips," Clarksons Platou analysts say. "Even at half the current VLCC rate, most owners have an earnings yield of above 75% and could thus earn back their entire market cap within a year."
- "Rates were trending higher and well above our breakeven levels before the sanctions on Cosco added fuel to the fire," says FRO's Robert Hvide MacLeod. "The fundamentals were in place due to U.S. exports, falling vessel deliveries, the highest refinery growth in 40 years, and healthy oil demand."
- Other potentially relevant tickers include NAT, NNA, NM,NMM,TNK, TNP, TK, DSSI, ASC, SFL, DHT, INSW, GNK, SB, SBLK, STNG