Oil supertankers losing millions but why tanker stocks are rallying
The market for moving oil across the world’s oceans is currently so bad that owners of the industry’s biggest supertankers are actually subsidizing the delivery of cargoes.
Strange to think, then, that shares of two of the market’s biggest pureplay owners — Euronav NV and Frontline Ltd. — have been steadily rallying since early February. It’s because the oil tanker sector is emerging as a hot coronavirus vaccine play.
The coronavirus has ravaged both global oil demand and supply, rendering the fees that owners charge for individual cargo deliveries little short of disastrous. But industry executives, shipbrokers and analysts all say there’s reason to be bullish: the more oil is kept off the market now, the harder the snapback will be as vaccination programs help to revive global oil demand — and with it the flow of cargoes.
