Another quarter, another flurry of activity for Frontline
For one, there was the partial spin-off of Independent Tankers to shareholders. Frontline also invested in both Navig8 and Overseas Shipholding Group
There's also a core business here, which benefited from a freight rate fiesta. VLCCs averaged $82,400 in the period, but that figure actually understates the strength of the market. The firm's double-hulled VLCCs trading in the spot market pulled down 27% higher rates than that fleetwide average. The second quarter is looking even better, with modern VLCC rates averaging about $112,000 so far. That's more than double the average rate in Q2 2007.
The tanker supply situation merits a review, because an overabundance of vessels would dampen those dreamy market rates. At the end of the first quarter, there were 486 VLCCs globally, with 184 on order. The phasing out of single-hulled vessels, which pose a greater environmental risk, can offset about two-thirds of those newbuilds. Add conversions to ore carriers and floating production, storage, and offloading vessels, and simple scrapping of old vessels. Finally, consider the shipyard delays being reported by OSG, Excel Maritime
As with Nordic American Tanker