Tag: Frontline

The ships are underemployed thanks to growth in the world tanker fleet Anyone looking out over the Bay of Algeciras by the Rock of Gibraltar over the next few months can expect to see plenty of ships. The bay is a popular spot to moor oil tankers - Algeciras's busy oil refinery is nearby and the bay's strategic location makes it an excellent place for temporarily idle ships.The ships are underemployed thanks to growth in the world tanker fleet that far outstrips the 1.3 per cent world oil consumption growth projected for this year and the 1.8 per cent projected for 2012.Figures from Fearnleys, an Oslo-based shipbroker, put this year's growth in the world fleet of very large crude carriers - the largest commonly used kind - at 14 per cent if none is scrapped. The figure for 2012 should be 9 per cent.The question is how many of the world's tanker owners can withstand the prolonged slump in earnings that the glaring imbalance is producing.Andreas Sohmen-Pao, chief executive of BW Maritime, part of his family's Hong Kong-based BW Group, says the market is "exceptionally weak"."Earnings are pretty close to zero, while break-even rates are close to $30,000 a day," ...

Global demand for oil is rising and the price of crude is surging Global demand for oil is rising and the price of crude is surging but companies in the business of shipping the valuable commodity by sea are suffering as the supply of tankers vastly exceeds the need for ships.For supertanker shipping companies, its a hangover from the prerecession boom in orders for new vessels, huge ships that take several years to build.The increase could be as much as 14 per cent for the worldwide fleet, which is predicted to reach 627 by the end of the year, compared with 548 last December.As the price to move oil plunges, and shipping companies see their profits evaporate, it is unclear whether oil producers or consumers will benefit. Competition among sellers of oil moved by supertanker, such as Saudi Arabia, might slightly shave prices to gain advantage against competitors, helping consumers, or could pocket the shipping savings.Respite for shipping companies will take time, according to the worlds leading supertanker company, Frontline Ltd., which on Wednesday reported quarterly earnings and an 81-per-cent decline in profit.It is hard to see a strong recovery in the tanker market, Frontline said in its assessment.The weak ...

The tanker industry is at the start of a 5-year downturn Frontline owner, the Norwegian-born John Fredrikson noted that leasing their ships to oil companies is currently facing a weak market and forces the company to become more passive, and possibly even sell assets, including vessels.The tanker industry is at the start of a 5-year downturn, according to Tor Olav Troeim, who is a director at Frontline and several other companies at a conference near Oslo on Tuesday.According to the Baltic Exchange, VLCCs that reaped $177,036 a day in 2008 were last at $8,900. These vessels would need $29,700 a day in order to simply break even for Frontline.Frontline will pay a dividend of 10 cents a share for the first quarter after net profit dropped from over $79 million to $15.5 million in one year, as released in a statement.In a statement released by Frontline, the board explained the low results from the first quarter, seem to be extending well into the second quarter and makes for a grim projector of the quarters to come. The board doesnt see a turnaround for the tanker market in the near future, as they believe the supply of ships is growing more ...