Oil Tanker Stocks Are Key Beneficiaries Of Tension In The Middle East

Oil Tanker Stocks Are Key Beneficiaries Of Tension In The Middle East
Jim Collins Jan 7, 2020 https://www.forbes.com/sites/jimcollins/2020/01/07/oil-tanker-stocks-are...

The CEO of Nordic American Tankers Ltd., Herbjorn Hansson, is no shrinking violet when it comes to trumpeting good news in the tanker market. In a stock market that is dominated by tech titans, the ridiculous amount of operating leverage that can be generated by oil tankers in time of political turmoil can be overlooked. Mr. Hansson’s press release this morning succinctly summed up the situation. Here is its text:

The good market for all our tankers is continuing.

We started the New Year and the new quarter with booking one of our 23 Suezmax tankers for a Time Charter Equivalent (TCE) in excess of $100,000/day. Although this type of rates cannot be expected for all our vessels in all areas, it is another confirmation of the strength of the market. Our operating costs are $8,000/day for each vessel.

During the last few days, we have seen political uncertainty in the Middle East, a center for seaborne oil transportation.

As we have repeatedly stated in our reports, political uncertainty is often positive for the tanker market. Dislocation of oil production now leads to longer transportation distances.

With or without political uncertainty, the tanker market is strong. On that note, we would like to wish everyone a good tanker year!

Nordic American Tankers Ltd.

Herbjorn Hansson