The strategic development came to light in a line buried at the end of Euronav’s latest earnings release, which serves as a guide for equity analysts who are looking to fine tune tanker market forecasts in anticipation of earnings season as the Belgian owner is often the first to report.
According to Michael Webber of Wells Fargo Securities, long-term transportation contracts with what is arguably the largest Chinese importer of crude have been key to the performance of Tankers International and members like New York-quoted heavyweight Overseas Shipholding Group (OSG).
“Physical market participants have noted a decline in the Unipec COA liftings since June and speculation around a split has persisted in the physical market,” he told investors following a 'read-through' of Euronav’s financials.
“With Euronav's reference supporting the notion that the Tanker International's (and thus OSG's) Unipec business is rolling off we believe [this] could pressure OSG's rate performance going forward.”
Based on Euronav’s assessment of Tanker International’s performance in the first leg of the third quarter, in which vessels earned around $17,200 per day on average with 32% of available days fixed, Webber believes Wall Street rate estimates will be trimmed in the weeks to come as the market gears up for earnings.
To read more about Tankers International and its new chief executive check out the fact box to the right of this article.
