Crude oil flow from the Hormuz field increased to 10.5 million barrels per day in October 2023. This significant increase in loading volumes occurred following recent crises between the United States and Iran. Initially, the volume of shipments from the Gulf region to the East was relatively low due to existing threats, but over time, the volume of cargo moved through the Strait of Hormuz increased dramatically.
Impact of the Crisis on Tanker Revenues
This increase in crude oil flow has allowed part of the tanker fleet to significantly boost their productivity. Ships now only need to carry short-term cargoes for transfer between ship to ship. However, after six months of a continuous upward trend in tanker revenues, following the electoral victory of the Democrats, we are witnessing a decline in tanker stock values and a drop in freight rates.
Challenges in Transportation Conditions
It is important to emphasize that a reduction in war premiums in oil prices does not immediately mean normal transportation conditions. Until existing disruptions are resolved, transportation conditions may remain abnormal. Even if the risk of further escalation decreases, security concerns, longer routes, shuttle trips, ship-to-ship transfers, and waiting times can exacerbate this abnormal situation.
Despite recent geopolitical developments, asset values have remained stable, and buying and selling activities are generally healthy. In the tanker market, it is still unclear what impact the election results will have and whether these effects will be sustainable.
In the dry bulk sector, buying interest in the capesize segment has slightly decreased. However, demand for panamax vessels from buyers in the Far East is very strong, and equipped vessels are facing high demand in both basins, which is reflected in revenues and asset prices.
In the supermax segment, the MIAO ZHOU vessel (with a capacity of 58,595 DWT, built in 2013, from KAWASAKI HI SAKAIDE) was sold for around $23 million. Additionally, the LR2 HAIMA vessel (with a capacity of 104,991 DWT, built in 2009, from MITSUI ENGINEERING & SHIPBUILDING CO.) was sold to unspecified buyers for around $65 million.
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