Shipping Market Tightens as VLCCs Earn $90,000 Per Day

In a sign of the increasingly tight conditions in the global shipping market, New York-listed owner DHT Holdings has fixed one of its 14-year-old VLCCs at a remarkable $90,000 per day for a one-year charter. According to a report from Splash247, the 320,000 DWT 'DHT Opal', built in 2012, has secured the lucrative one-year deal. Rates of $90,000 per day for a VLCC of that vintage would have been unheard of just a short time ago, but the extreme supply-demand imbalance in the crude tanker segment has pushed earnings to new heights. 'This is yet another indication of the strength of the VLCC market,' Clarksons Platou Securities analyst Frode Mørkedal told Splash247. 'Earnings for modern VLCCs are now above $100,000 per day, and even older tonnage can command very healthy rates.' The tight conditions in the VLCC segment are being driven by a combination of factors, including strong demand for crude oil shipments, limited fleet growth, and disruptions to Russian oil exports following the invasion of Ukraine. Industry analysts expect the VLCC market to remain strong through 2023 as the global economy continues to recover from the COVID-19 pandemic. In other maritime news, iron ore port stockpiles in China remain at elevated levels, though they are not seen as a major headwind for the dry bulk shipping sector. According to Hellenic Shipping News, iron ore inventories at Chinese ports stood at 160.9 million tons as of last week, just 100,000 tons below the all-time high reached in 2018. While high stockpiles can sometimes signal weaker demand, analysts believe the current levels are manageable and not likely to significantly impact freight rates. Meanwhile, the maritime industry is also grappling with regulatory challenges, as NGOs have filed a case against the European Commission's decision to allow fossil fuel-powered ships and planes to be labeled as 'sustainable investments' under the EU Taxonomy. The case, brought by a coalition of environmental groups, argues that this designation is misleading and undermines efforts to decarbonize the shipping and aviation sectors. In a positive development, shipping company Oldendorff Carriers and mining giant BHP have announced a new initiative to attract more women to careers in the maritime industry. With women currently making up just 1% of the global seafarer workforce, the two companies are collaborating on programs to increase diversity and broaden access to maritime careers.