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CPP Fleet Utilization Spikes

April 29, 2022

Clean tanker utilization has exhibited a strong upward trend since the beginning of the war in Ukraine, predominantly for the LR2 and MR2 sectors.  This jump can be attributed to two main factors.  On one side, most nations are moving past the pandemic and global demand for products is picking up.  On the other side, it represents an effort from traders to meet demand in Europe (mainly) from refining centers in the East of Suez but also the US Gulf, especially now that significant volumes from Russia are “lost”. 

There are still numerous questions regarding the future of product supply ...

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CPP Vessel Contracting & Fleet Profile

April 22, 2022

CPP vessel contracting activity has been significantly lower than the same period last year, with only a total of 9 orders for MR2 tankers, compared to 29 MR2 orders for Q1 2021 (Figure 1).  Similar to the DPP sector, subdued activity can be partially attributed to shipyards being close to their full capacity (on mostly other type of vessel orders such as containerships) as well as the very high steel prices that make a newbuilding uneconomical for the long run, even if the current volatile environment is currently benefiting rates.

With our multivariate models pointing to the price of steel ...

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DPP Fleet Ordering Activity and Profile

April 8, 2022

DPP vessel contracting activity remained very low during the first two months of the year with only two Aframax tankers ordered in January (Figure 1).  Steel prices continue to be very high and shipyards have limited capacity -owing to strong ordering for other types of vessels such as containerships and gas carriers-, pushing prices of newbuildings upwards. In the current context of increased market uncertainty and volatility due to the situation with Russia and Ukraine, our multi-variate models project average DPP tanker asset prices to slightly increase this year and proceed to stabilize throughout the period 2023 to 2025. 

This ...

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Sanctions Removal Scenarios

April 1, 2022

We have counted over 80 VLCCs of over 15 years of age changing hands since January 2020, the majority of them going to previously unknown entities, mainly in Asia (Figure 1).  Out of those “ghost ships”, about 40% has been observed to load in Iraq, perform STS operations near Malaysia or turn off their AIS transponders.  All of these actions point to those tankers participating in illicit trading activities most likely with Iranian or Venezuelan barrels.  As we have discussed in previous reports, these tankers are part of the oversupply problem given they are taking potential cargos away from conventional ...

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