Tanker Rate Surge Drives Record ClarkSea Index Spike

Clarksons’ ClarkSea cross-sector earnings index recorded its biggest ever absolute increase on the back of improved tanker rates which were driven up by a number of factors including a series of Middle East attacks on tankers and recent US sanctions decisions.

The index rose by 55%, to USD 31,207 a day, after it recorded its biggest ever weekly percentage move a week before.

Clarksons said the spike was predominantly tanker driven, with VLCCs seeing rates as high as USD 307,888/day.

“The main driver behind the dramatic ClarkSea jump has of course been the tanker market, with the tanker element of our ClarkSea Index up 323% over two weeks to USD 80,255/day, exceeding the previous all-time high of November 2007,” the global shipping intelligence provider said.

“Our average VLCC spot earnings series has moved even more spectacularly, up 516% from USD 50,002/day to USD 307,888/day!”

Clarksons said its tanker market supply and demand projections have been “encouraging”, with 5% tonne-mile demand growth projected for next year, alongside 2% fleet growth.

However, US sanctions on selected subsidiaries of the world’s largest (3.8% of global tonnage) shipping group and largest (3% of tonnage) oil tanker group that sent the market into a frenzied scramble to secure tonnage have had a significant impact. Further reports of other sanction-related chartering clauses related to Venezuela have added to the confusion, creating additional ingredients for this spike and the bullish position of owners.

The market is now also trying to digest the news of another Middle East tanker attack. A Japanese typhoon has also added disruption.

The previous four biggest weekly moves in the ClarkSea all took place in 2007 and 2008, three driven by the tanker market and one by the bulk carrier sector. One of these previous spikes took place in early December 2007, when an already tight market was “turbo-charged” by demand for double hull tankers following a Korean oil tanker spill and the Clarksea Index actually reached its highest ever level of USD 50,714/day. To get to those sort of levels, the market would need much more support from bulkers, containers and gas, Clarksons concluded.