NAT: Political Uncertainty Helping Tanker Market Bonanza
Nordic American Tankers (NAT) has a lot of reasons to be jolly this year, as it starts the new quarter with a booking for one of its Suezmax tankers for a Time Charter Equivalent (TCE) worth over USD 100,000 per day.
The company has been enjoying strong rates over the recent period dubbing it a real bonanza in the tanker market.
“Although this type of rates cannot be expected for all our vessels in all areas, it is another confirmation of the strength of the market. Our operating costs are USD 8,000/day for each vessel,” Herbjorn Hansson, Chairman & CEO of NAT, said.
Commenting on the potential impact of the political uncertainty in the Middle East, a center for seaborne oil transportation, over the past few days, following the assassination of Qassem Soleimani, an Iranian military commander, by the United States on January 3, 2020, Hansson said that political uncertainty is often positive for the tanker market.
As explained, the dislocation of oil production now leads to longer transportation distances. However, with or without political uncertainty, the tanker market is strong, he added.
In December 2019, NAT said that it had secured work for a string of its vessels for voyages extending well into the New Year and the first quarter of 2020.
The spot voyages are said to be generating between USD 35,000 per day to USD 80,000 per day per ship, which NAT characterized as a sign of strengthening market conditions.
The positive momentum in the market has been attributed also to the IMO 2020 sulphur cap that entered into force on January 1, 2020, spurring demand for tankers as well as growth in oil exports from the USA resulting in increased crude oil volumes and longer sailing distances.
From its 23 identical Suezmaxes, 21 vessels are employed in the spot voyage market.