Non-scrubber fitted VLCCs suffer lowest rates seen this century

VLCC spot earnings averaged just $500 a day on the benchmark TD3C trade between the Middle East and China during the first half of the year on a slowsteaming, non-scrubber, non-eco basis, marking the lowest half yearly result this century according to tanker broker Gibson.

VLCCs have been the worst performer in the tanker sector, earning less than even handy/MR tankers on benchmark round voyage trades.

According to Kpler, during the first half of the year total Middle East crude exports, which account for the lion’s share of all VLCC trade, averaged 15.25m barrels per day, down by 2.1m barrels per day compared to H1 2020 and even more if compared to H1 2019. Meanwhile, 37 VLCCs have been delivered since July last year, while just six units have been scrapped although there have been a few more reported demolition sales of floating storage units. There has also been a notable decline in VLCC floating storage.

Apart from very weak fundamentals, Gibson has pointed out another factor at play, explaining why VLCC earnings on a non- scrubber, non-eco basis have underperformed relative to other tanker sizes. The VLCC fleet has the highest uptake of exhaust gas cleaning technology. Nearly 39% of the existing fleet have scrubbers installed, while another 5% are still planning to retrofit. The technology is also expected to be installed on around 34% of the orderbook. The penetration of scrubbers is considerably smaller on other size groups.

Scrubber-equipped vessels have been able to generate increasingly higher returns due to rising bunker prices. For scrubber-equipped VLCC tonnage the earnings premium on TD3C nearly doubled from $4,000 a day to $7,000 a day over the first six months, even though absolute freight/TCE levels were much higher in H1 2020 compared to H1 2021.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.


  1. “The Joy of Tankers!”

    I never got below a TCE of US$2,200/day myself, but that was in the nineteen eighties, when a dollar was a bit more like a dollar… Years later, Tor Olav Troim told me that that was, “Nothing to be proud of”, but I feel a whole lot better about it now!

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