Industry Note No. 2 - VLCCs Rejoice in Oil Market Chaos

The sequence of events beginning with the US sanctions on COSCO, their eventual waiver, Coronavirus demand implications and most recently the collapse of OPEC+ has undoubtedly created the most volatile freight markets in recent history. In this note, our objective is to assess the impact on VLCC tanker fundamentals and freight rates from the reported increase in Middle East crude oil supply, primarily from Saudi Arabia, against what continues to be a weak demand environment from a slowing global economy compounded with pressures related to the Coronavirus.