Tanker rates expected to increase in the near term

By OGJ editors
HOUSTON, Dec. 17 -- Upward pressure on crude oil tanker rates is expected to continue for the next 3-6 months due to uncertainties surrounding geopolitical events, said analysts at Poten & Partners Inc., New York.

"The first 9 months of this year has been a time of relative stability in the world of tankers. This has been shattered. We have moved into a time of instability punctuated with what appears to be an imminent invasion of Iraq," a Dec. 6 research note said.

"Wild cards, or unforeseeable events, are being dealt at a near-record pace. Rates will not fall until we see resolution of some of these issues," Poten & Partners said.

Very large crude carriers already saw a recovery in charter rates this year (OGJ, Oct. 28, 2002, p. 7).

"With (Arabian Gulf) exports climbing, expect upward momentum in VLCC rates to continue," Poten & Partners said.

Meanwhile, rates for Aframax tankers (80,000-120,000 dwt) vary depending upon location, analysts said.

"In the Caribbean, political uncertainty in Venezuela has caused exports to cease and rates have collapsed. In contract, Aframax rates in Asia are going up," they said.

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