TMSA 3 Archives - SHIP IP LTD

In the third in a series of interviews ahead of the Saudi Maritime Congress Zabrocky speaks about prospects for the tanker market and the Middle East region.

Zabrocky told Seatrade Maritime News that tanker markets had been improving steadily throughout 2022 and continued to do so. “The world is returning to a busier pace of activity as we navigate the third year of Covid-19 and its impacts. This positive growth bodes well for our tanker business,” she said.

Improved markets were reflected in the NYSE-listed shipowner’s second quarter results with it reporting a net income of $69m compared to a net loss of $18.8m in the corresponding quarter in 2021.

The company completed what Zabrocky describes as a “transformational merger” with Diamond S Shipping in July last year. The merger tripled the size of International Seaways’ fleet and a diversified its portfolio with the addition of over 40 products. International Seaways fleet comprises crude tankers – covering VLCC, Suezmaxes and Aframaxes, and LR1, LR2, and MR product tankers.

“At International Seaways, our tankers are transporting both crude and products throughout the Middle East. The region is a key supplier of oil for the world markets. For our business, this is the most important region in the world, and we look forward to growing our market share over time.”

Zabrocky will be a speaker at the Saudi Maritime Congress, taking place on September 28-29 in Dammam, Saudi Arabia.

She added that Saudi Arabia was a visionary country with tremendous supplies of oil as well as natural resources. “They are a thought leader and an innovator for the world,” she said.



CREWEXPRESS STCW REST HOURS SOFTWARE - Paris and Tokyo MoU have announced that they will jointly launch a new Concentrated Inspection Campaign (CIC) on Standards of Training, Certification and Watchkeeping for Seafarers (STCW) from 1st September 2022 to 30th November 2022


Singapore’s First Ship Lease Trust (FSL) has announced the sale of 2006-built (Hyundai Mipo) product tanker FSL Singapore to an unaffiliated third party.

The vessel was the only ship in the FSL fleet trading in the spot market, and leaves the company with eight product tankers which are all chartered by James Fisher.

Earlier this week, FSL announced it was looking to expand its portfolio into renewables and energy-related offshore assets that generate long-term cash flows and income. The owner said that volatility and fierce competition, among other things, make it difficult to develop a competitive advantage in existing shipping markets.



CREWEXPRESS STCW REST HOURS SOFTWARE - Paris and Tokyo MoU have announced that they will jointly launch a new Concentrated Inspection Campaign (CIC) on Standards of Training, Certification and Watchkeeping for Seafarers (STCW) from 1st September 2022 to 30th November 2022

Italy’s d’Amico International Shipping has gained 100% control of Ireland-based Glenda International Shipping via the redemption of the shares owned by Topley Corporation, part of Glencore, in the 50:50 joint venture for $27.4m.

Glenda has four MR tankers in its fleet, ranging in age between 11 and 12 years, and all built at Hyundai Mipo in South Korea.

Paolo d’Amico, chairman and CEO of d’Amico International Shipping, stated: “From a strategic perspective, we plan to operate the vessels for a few years to benefit from the current strong markets before we start gradually selling them, with the objective of doing so prior to their 15th anniversary, seeking to continue controlling a young and fuel-efficient fleet.”



CREWEXPRESS STCW REST HOURS SOFTWARE - Paris and Tokyo MoU have announced that they will jointly launch a new Concentrated Inspection Campaign (CIC) on Standards of Training, Certification and Watchkeeping for Seafarers (STCW) from 1st September 2022 to 30th November 2022

According to New York broker, Poten & Partners, the last VLCC contract was placed in June 2021, followed a month later by the last Suezmax order. No new panamax tankers or LR1 tonnage have been ordered since April 2020 and only six Aframax/LR2s and seven MRs have been ordered so far this year, the broker said.

The tanker market is fraught with uncertainty. Not only do owners face prices up by close to 20-30% on first-half 2021 prices, but there is uncertainty on propulsion type and, of course, bigger questions about the future of tanker shipping generally as the world’s decarbonisation drive becomes more urgent.

“There is the general expectation that global oil demand (and its transportation) will likely peak within the nest 10-20 years,” Poten said in its most recent weekly Tanker Opinion.

For a shipowner, that is not a strong incentive to invest in an asset that has a 20-year life. Especially, if (in the case of a VLCC) it is 28% more expensive than last year and you won’t get it delivered for at least another two years.”

That explains why tanker owners are targeting secondhand tonnage. A secondhand tanker is cheaper (in relative terms), Poten said, and can be employed in today’s rising market immediately.

Noting that Greek and Chinese owners have been particularly active as both buyers and sellers, the broker said: “Buyers want to expand or renew their fleet to take advantage of rising rates, while sellers see an opportunity to shed older assets at attractive prices and/or realise some gains on previously acquired tonnage.”



The ship recycling market has remained in a difficult state with very few demolition candidates. In its latest weekly report, shipbroker Clarkson Platou Hellas said that “there was more upheaval to report this week, this time coming from Bangladesh, where despite price levels showing signs of improving, the Bangladeshi Government introduced new restrictions to limit the outgoing volume of U.S. Dollars for ‘essential’ purchases only. This will now pose serious questions concerning these improved levels for any available tonnage in the foreseeable future. As such, the government announced that any Letter of Credit exceeding USD 5.0 million must be approved by the Central State Bank for opening. In addition, reports this week suggest that the Government of Bangladesh has sought a USD 4.5 billion loan from the International Monetary Fund as it seeks assistance to cope with the mounting pressure on their economy. It is understood the Bangladeshi Taka has devalued by about 20 pct against the U.S. Dollar over the last few months weakening the country’s finances. We are already hearing of cash buyers facing difficulties reselling any larger LDT tonnage that they have in hand due to these restraints and it is expected that this will continue for some time, thus the question will be, whether Bangladesh will be aggressive to purchase any large LDT vessel that comes into the market. Concerning times indeed for the local Chattogram market! Elsewhere, India is seemingly the more stable and competitive market, but again the dwindling of tonnage being circulated is a cause for concern for the domestic industry. Across their border, the recyclers in Pakistan look set to take a position on the side-lines as their price levels remain far less competitive than their counterparts in India and even Bangladesh”, the shipbroker concluded.


Source: Clarkson Platou (Hellas) ltd

Meanwhile, Allied Shipbroking added this week that “the ship recycling market appears to have noted another slight step back, with offered prices levels across the Indian Sub-Continent having noted another correction as of this past week. Activity continues to remain at sluggish levels, though the slakc in buying appetite is only one half of the equation at hand. We are still seeing a very small number of demo candidates coming to market these past few weeks, while given the lower price levels on offer this trend is likely to continue to hold for the remainder of the summer period. In the separate demo destinations and more specifically that of Bangladesh, conditions for local breakers seem to be deteriorating further, with the local economy in a tight squeeze and local banks likely to find it difficult to support the market under these conditions.

Source: Allied Shipbroking

Things have been holding slightly better in India, though with lack of strong competition from Bangladesh and Pakistan and with the Indian Rupee struggling to hold steady, it looks as though all appetite amongst buyers to give out any bullish offers have evaporated for the time being. Pakistan has also seen increasing levels of difficulties emerge. Facing both economic and political uncertainty at home, local breakers are backing down from any strong offers, while the increased monsoon rains of late are also causing disruptions in operations for the time being”.

In a separate note this week, GMS , the world’s leading cash buyer of ships, said that “fears and concerns across the sub-continent recycling markets continue to grow as local currencies across all major ship-recycling destinations continue to worryingly depreciate by the day and some even tougher restrictions reportedly set in place on the opening of fresh Letters of Credit (L/Cs) in Bangladesh this week, as the foreign currency crisis in the country deepens further. In fact, the currencies have been such a source of frustration for the ship recycling community that the U.S. Dollar transactions are getting uncontrollably out of hand. The Pakistani Rupee has depreciated by a whopping 44% since the start of the year and shows few signs of stabilizing just yet. Bangladesh too has not escaped the forex collapse and remains in a perilous state. In fact, this week, the Bangladeshi government has applied to the IMF for a USD 4.5 Billion bailout, with the economic crisis continuing to eviscerate ‘non-essential’ large dollar value international trade.

Source: GMS,Inc.

Moreover, on the Bangladeshi L/C front, any L/C over USD 3 million now has to be approved by the Central State Bank – this is down from the USD 5 million limit imposed just last week and illustrates just how grave the situation is locally. Inflation in Bangladesh too is the highest it has been for a decade at about 7.50% whilst the Bangladesh Taka has depreciated by about 11.5% in the year to date in further troubling signs. India, ironically (given it’s volatile steel plate prices), remains the strongest and most resilient economy, but it is hardly encouraging to see competing markets in such dire straits, with talks plaguing the region that a similar collapse as that seen recently in Sri Lanka could be a serious possibility for those under siege countries. Finally, in Turkey, the situation is mirroring the Pakistani market, with weakening steel plate prices and a currency that seems doggedly intent on breaching TRY 18 at some point. As such, ship recycling is taking a backseat to these far more prescient worries at the moment – with nearly no new sales at least troubling recyclers for the time being”, GMS concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

Iran is overcoming trade barriers and sustaining a high level of crude oil exports by deploying more of its own sanctioned tankers, according to watchdog United Against Nuclear Iran.

The nation’s petroleum industry is heavily sanctioned by the United States, but it continues to export a steady flow of about one million barrels a day into the global market; in fact, it is earning more money than it has in years thanks to rising oil prices. Its clandestine trading network relies on a small number of private shipowners who are willing to violate U.S. sanctions and evade detection in exchange for outsize financial returns.

UANI estimates that about 200 foreign-flagged vessels have engaged in this trade in recent years – but many of them are now switching to the covert shipment of Russian oil, which carries a stigma due to the invasion of Ukraine. The organization has identified 16 foreign tankers that have made the switch from Iranian to Russian cargoes, and trade flow analytics firm Vortexa has identified 11; there may be more, given the covert nature of the operation, which relies in part on high-seas STS transfers. The switch has reduced the availability of privately-held tonnage for the Iranian oil trade.

Ongoing American enforcement activity may also be disrupting Iran’s network of foreign-flagged tanker operators, according to UANI. Last month, the U.S. Treasury sanctioned several of Iran’s shipowning and trading partners, including an alleged repeat offender in Singapore with ties to multiple “dark” vessels.

But the reduced availability of foreign tonnage is not necessarily an obstacle to Iran, since the nation owns its own aging tanker fleet. The Iranian fleet’s activity has increased over the past month, according to UANI. In all, nine Iranian-flagged tankers were detected loading in July. An increasing number are openly heading for Venezuela, delivering ultra-light condensate in exchange for ultra-heavy sour crude. Venezuela needs condensate to dilute its tar-like oil for export or refining; without it, the heavy crude is too difficult to ship. Since this exchange is a swap, and both parties are already heavily sanctioned by the United States, there is no obstacle to using sanctioned Iranian tonnage to carry out the transportation.


The following article published by Manifold Times on 27 July was sourced from China’s domestic market through a local correspondent. An online translation service was used in the production of the current editorial piece:

Law enforcement officers of the Dongjiakou Maritime Safety Administration on Wednesday (13 July) cracked down on Aframax tanker “Ka xx” and found sulphur content of its bunker fuel to exceed the permitted amount of 0.5%.

The officers first found the vessel emitting black smoke during an inspection and told the crew to resolve the issue.

However when the situation did not improve, the officers proceeded to collect samples of its fuel and sent them to a third-party testing agency. The officers found that the sulphur content exceeded the standard while suspecting illegal fuel was used. No further details were provided by the local authority on the amount of sulphur content found.

The ship was then detained in accordance with local laws for further actions.

This is the second illegal use of non-compliant fuel oil investigated and handled by Dongjiakou Maritime Safety Administration this year.

Previously, law enforcement officers of Dongjiakou Maritime Safety Administration found the sulphur content from oil samples collected from “Tai xx” at berth D23 in Dongjiakou was 1.21%.

This exceeded the control standard of 0.5% of sulphur content permitted according to the “2020 Implementation Plan for Global Marine Fuel Sulphur Restriction Order”.

After investigating the two cases, the authority found that both ships were Aframax oil tankers.

Following this, the Dongjiakou Maritime Safety Administration issued a fuel compliance warning, reminding Aframax ship operators or managers to only utilise compliant bunker fuel.


Liberian oil tanker, Neptune. Source: Erwin Willemse/Marine Traffic.

Underpayment of crew and poor working conditions have led to the banning of a Liberian-flagged oil tanker, Neptune, from Australian ports for six months.

After receiving a complaint regarding the underpayment of seafarers and welfare issues, the Australian Maritime Safety Authority (Amsa) inspected the ship in the Port of Gladstone, in central Queensland and found evidence that the employment agreement with 21 seafarers on board the ship had not been met and the crew members were collectively owed approximately AUD$123 000 (R1 431 403.89).

Amsa found evidence the food and drinking water were not of appropriate quality, quantity and nutritional value for seafarers. It’s also understood a seafarer was not provided with adequate medical care after being injured on board.

As a result, Amsa detained the ship for multiple breaches of the Maritime Labour Convention (MLC) and the operator has been directed to pay the outstanding wages and address the deficiencies.

Amsa’s executive director of operations, Michael Drake, said the seafarers had repeatedly not been paid at regular intervals and two crew members had expired Seafarer Employment Agreements.

“Ships visiting Australian ports are on notice that if we find deliberate underpaying of crew they can expect penalties,” he said.


Low recycling prices for vintage tonnage are expected to hinder any increase in the number of units sold over the next few weeks. In its latest weekly report, shipbroker Clarkson Platou Hellas said that “we are trying to establish from where a concession will appear, the Sellers or the Buyers! On the outside we do not envisage many units to come for recycling for the next month at least and therefore it would need the actual recyclers to increase their rates to tempt any Owner contemplating a recycling sale. However, financial restraints and weakening currencies against the U.S. Dollar continue to put cause for concern amongst the Indian sub-continent recycling community and ensures no over-inflated levels at this current time. There are rumours abound of Letters of Credit unable to be opened for larger LDT tonnage, particularly from Bangladesh, which further creates difficulties when and if a vessel of this ilk comes for sale. We are now witnessing actual sales of tonnage for recycling fall to their lowest levels in a decade and certainly we cannot predict a massive change any time soon during the summer months and heading into the final quarter of 2022”, the shipbroker said.


Source: Clarkson Platou (Hellas) ltd

In a separate note this week, Allied Shipbroking added that “the ship recycling market appears in a rather “weird” state as of late. Activity has slowed down significantly, that is partly though explained from seasonality factors, but scrap price levels continue experiencing considerable pressure as well, for a period now.

Source: Allied Shipbroking

In the separate demo destinations and more specifically that of Bangladesh, things are losing momentum, given the currency depreciation and the recent shortage of US Dollar reserves, altering the Letter of Credit availability and as such making the overall local market unable to compete for larger ldt units. In Pakistan, the scene indicated many similarities, facing the same type of difficulties while also at the same time being the least competitive destination for some time now within the Indian Sub-Continent. The Indian market, despite the excess volatility in local steel prices, when compared with the other main Indian Sub-Continent Recyclers, may well have prevailed as the most stable market in the near term (at least)”.

Meanwhile, GMS , the world’s leading cash buyer of ships said in its weekly report that “as the ship recycling sector continues to try and adjust to these new lower realities on price, in addition to adhering to new regulations on L/C limits amidst a dire shortage of U.S. Dollars foreign exchange / reserves in both Pakistan and Bangladesh, the industry is certainly going through an uncertain period. This week, the Bangladeshi government introduced new limits to cap the outgoing volume of U.S. Dollars for ‘essential’ purchases only – raising question marks about higher priced vessels for recycling purchases in the foreseeable future. As such, the government announced that any L/C over USD 5 million has to be approved by the Central State Bank for opening, with the Bangladeshi Taka struggling to such a worrying extent of late.

Source: GMS,Inc

Unfortunately, the currency situation is no better elsewhere as we are witnessing fresh historical lows by the day in all of the major recycling destinations on their respective currencies against the U.S. Dollar, and there have been elevated fears across these locations that international trade may eventually start driving domestic inflation up as the U.S. Dollar continues to strengthen rapidly. Keeping things in check is the fact there are very few new units to work on, now that the tanker chartering market is firming further and this may give the recycling markets, some time to settle and stabilize before fresh units are proposed to Recyclers once again come Q4. While Pakistan has registered a massive drop in local steel plate prices this week, India remains the most stable of the sub-continent markets despite the extreme volatility on Indian plate prices seen on a near daily basis and similar worrying currency depreciation is leaving Alang Recyclers confused and nervous on any firm offers moving forward. On the West End, Turkish plates take another tumble this week as even the currency – like all the major recycling locations – continues its steady slow descent to oblivion”, GMS concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

The Russia-Ukraine war and sanctions on Russia’s refined products have created a void in the European market, which is counterbalanced largely by South Asia.


The product tanker sector has been gaining from the ongoing geopolitical tensions as a sudden rise in the long-haul trade has boosted freight rates. Drewry expects the shift in trade – from short-haul to long-haul – to become the ‘new normal’ of refined products shipping with Europe sourcing cargoes from South Asia, the Middle East, and North America in 2022-23. Russia’s 2 mbpd of spare capacity and 0.8 mbpd YoY drop in refinery throughput in 2022 as a result of sanctions supports this trend.

Europe was dependent on Russian refined products as the latter contributed 15.9%, aggregating 21.6 million tonnes, to the total European seaborne imports in 2021, with gasoil/diesel comprising 95.4% of the traded volume. On 24 February, the Russia-Ukraine conflict turned into a full-fledged war after which Europe has been reducing its reliance on Russia. Although there were no clear sanctions immediately, CPP exports from the FSU to Europe weakened by about 1.1 million tonnes during March-April, with almost all the deficit created by gasoil/diesel.

Europe counterbalanced Russia’s share by importing around 2.9 million tonnes of CPP from the Middle East the US and Asia. Among these regions, South Asian exports increased by 0.74 million tonnes in March-April, with gasoil/diesel contributing 77.5% to the total share. The Middle East and Southeast Asia followed with a rise in exports by 0.72 million tonnes and 0.58 million tonnes, respectively.

Meanwhile, the gasoil/diesel trade shifted significantly as Russia lost a 15.2% YoY in European gasoil imports during March-April. Although the US has emerged as the prime supplier of gasoil/diesel to Europe after Russia in 2021, South Asia (mainly India) captured the largest share (5.7%) by supplying maximum replacement cargoes to Europe. South Asia was followed by North America (the US) and Southeast Asia (Singapore). The Middle East stands at the fourth position with only a 2.5% increase in share.

As a result, European buyers have shifted from the short-haul trade (between Russia and Europe) to the long-haul trade by sourcing refined products from South Asia, the Middle East, and North America.

We expect this long-haul trade to be the ‘new normal’ for product tanker shipping as Europe intends to shun Russian imports. As supply from North America is unlikely to replace the gasoil/diesel gap created by Russia, we expect South Asia to be the largest contributor, with the Middle East gaining the second largest share in European CPP imports in 2H22.

We expect the product tanker shipping market to enjoy strong rates throughout 2022 on the back of increased tonne-mile demand. Although LR and MR tankers are the true beneficiaries of the rise in rates, smaller tankers will also fetch high rates due to the robust demand.
Source: Drewry


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