Who Would Provide Funds for the Tanker Sector These Days?

by Philip Rankin

Gone, seemingly, is the reassuring cushion of inflation keeping the security value buoyant. Gone with it are meaty double-figure interest rates. Almost gone is a decent blue-chip timecharterer market, ready to provide guaranteed employment and income for the asset.

Most sectors of shipping and ship finance are captivated by industrialization – a buzzword that means turning shipowning enterprises, and often the enterprises of the cargoes they carry, into homogeneous businesses in which each section contributes in turn to the overall results. For example, old ships subsidize new, until the “new” become old; and market fluctuations, which rarely occur consistently in all sections at once, allow grain shipments to subsidize cars one quarter, and cars to subsidize grain the next.

Unfortunately for oil tankers, precisely the opposite now exists. Anxious to avoid the risk of the whole operation being swept away by one accidental American spill, bigger general shipping companies very publicly have spun off their tanker companies into sealed and separate units: Hoegh gave birth to Bona, for example.

This is only an excerpt of Who Would Provide Funds for the Tanker Sector These Days?

Content is restricted to subscribers. To continue reading please Log-In or view our subscription options.