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Don’t rush out and buy a new VLCC yet, but things are a little better…

By • Jun 13th, 2014 • Category: Tankers

The Coracle tanker market podcast for June 13, 2014 in association with Braemar-Seascope

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Thanks for downloading the VLCC Tanker Market report podcast from and Braemar Seascope for June 13th 2014.

This week has seen something of a recovery in VLCC freight rates, led by an increase in enquiries. Before you rush out to order more V’s, it is worth noting that the recovery has only managed to get as far as covering operating costs, there is no profit to be had yet. It has simply been a case of enough volume encouraging owners to bravely ask for enough freight to cover their expenses. The overbearing list of available ships in the East will always be the decisive factor, and while there is enough resistance to put rates back to opex, there isn’t much desire to try to push up from there.

Brent crude has spiked to $ 112/bbl amid concerns that continuing violence in Iraq could threaten operations at the country’s oil installations. Currently all the violence has been concentrated in the north, where the pipeline that pumps Kirkuk crude has been offline since March. The current spate of fighting should not affect Basrah exports, as Basrah is far to the south and is also heavily protected by the army, although there are concerns that supplies to Basrah could be damaged should the fighting advance unchecked. This is all speculation for the moment but oil benchmarks are reacting to fears of instability across the region, and the volatility in oil prices will push bunkers—and the cost to owners higher.

It has been an interesting week in West Africa with Chinese charterers discovering their thirst for west African crude. We have picked up seven fixtures to China already in the first half of the month, together with a couple of Indian charterers and an oil major. This procession of cargoes has meant that the early July position list is tight now for VLCC availability and rates have improved to 260 at 41 for West Africa/China. Fixing dates in West Africa have moved out to the 15-20 July range.

In the Caribbean it has been very quiet without any fixtures reported: we still rate $3.6million for Caribs/Singapore with last fixtures done off end-June. Early July stems are expected to start coming to market next week.

The 30 day availability index shows 81 VLCCs arriving at Fujairah of which five are over 15 years old which compares to 95 last week. We have now seen 100 cargoes fixed for the month of June from the Arabian Gulf and we expect approx. ten more cargoes for the last decade.

Thanks for listening