(Bloomberg) -- The oil-price war between Saudi Arabia and Russia is throwing a lifeline to the tanker market, which has been hobbled by the coronavirus outbreak sapping demand.
Earnings for supertankers on the benchmark route from the Middle East to China have jumped to $166,147 a day -- a 137% increase from Tuesday, Baltic Exchange data show. That compares with $30,339 a day on March 6.
Until this week, those earnings were down by about 70% this year due to the virus. They started to rebound on Monday, following the breakdown of talks last week between OPEC and its allied producers, particularly Russia. Oil prices slumped after Saudis indicated it would flood the market with more oil, increasing the demand for ships needed for floating storage.
A second, stronger wave arrived Tuesday after Saudi Arabia’s national shipping company, known as Bahri, booked as many as nine supertankers to load this month and next from Saudi Arabia’s main oil ports, according to vessel pool Tankers International. Earnings Wednesday were the highest since mid-October.
“We seldom see Bahri on our fixture lists, and this thus underscores Saudi’s intention to flood the market with oil in the coming months,” said Espen Fjermestad, an analyst at Fearnley Securities AS in Oslo.
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