VLCC freight rates have fallen to year-to-date lows in recent weeks as this tanker sector remains awash with tonnage, despite growing demand for cargo transport. For the remainder of the year, we are likely to see weakness, relative to previous years, persist through the seasonally stronger winter period.
Hurricane season creates many challenges to the tanker markets; infrastructure is damaged, ports are closed for extended periods and tankers are delayed in loading or discharging cargoes. The freight rate environment exhibits volatility as a result of chaotic trading patterns required to mitigate the immediate impacts from the weather disruptions. In this note, we analyze how the disruptions from Hurricane Harvey impacted the tanker markets and what may be expected from Hurricanes Irma and Katia.