Second-hand crude tankers reach highest values in 15 years

“Second-hand crude tanker values for five-year-old ships hit bottom levels in late 2020 and have since increased by an average 67%. Over the past twelve eventful months values have risen by 34%, reaching their highest level in 15 years,” says Niels Rasmussen, Chief Shipping Analyst at BIMCO.

Crude tanker values saw their most recent low in December 2020 when Clarksons Research estimated the combined value of a five-year-old Aframax, Suezmax, and VLCC was USD 138.5 mill. Twelve months ago, that valuation had risen to USD 172.0 mill. (+25%). Since then, another USD 59.0 million has been added in value, and the three five-year-old ships are now valued at a combined USD 231.0 mill. (+34%).

“On the demand side, global oil consumption suffered during the COVID-19 pandemic, especially in 2020. The recovery in consumption since then has helped increase ship values. The US Energy Information Administration (EIA) estimates that global consumption in April 2023 hit 100.0 million barrels per day, 7% higher than in December 2020,” says Rasmussen.

During 2022, Russia's invasion of Ukraine led to numerous sanctions on Russian exports by G7 countries. The EU's ban on Russian oil imports took full effect in August 2022 and reshaped both Russia's exports and EU's imports. Russia's oil exports now contribute 83% more tonne miles to the dirty tanker trade than they did a year ago. Particularly India and China have stepped in to buy the oil no longer flowing to the EU. The EU has increased imports from particularly the Persian Gulf and the US Gulf, and imports now contribute 13% more tonne miles than a year ago, and 42% more than at the beginning of 2022, as some EU buyers already started finding new suppliers immediately after Russia's invasion of Ukraine in late February 2022.
 

The opinions expressed herein are the author's and not necessarily those of The Xinde Marine News.