Belgium’s Euronav expects pressure on freight rates to continue until late 2021, the tanker operator said as it reported weaker than expected quarterly results on Thursday, citing OPEC+ export cuts because of the COVID-19 pandemic’s impact on demand for oil.
The company, one of the world’s largest tanker companies, benefited from soaring demand for oil storage at sea in early 2020 as buyers struggled to find space for surplus crude when demand collapsed during the first wave of the pandemic.
However, reduced OPEC+ exports limited oil oversupply in the second half of the year.
“As a result, the market remains unbalanced with too many ships chasing too few cargoes,” Chief Executive Hugo De Stoop said.
He added that some encouraging signs are emerging, such as higher scrap steel prices boosting returns when it retires old ships, but crude consumption needs to return to more normal pre-pandemic levels to restore sector profitability.
Euronav swung to a fourth-quarter net loss of $58.7 million, against an average forecast of a $41.8 million loss in a Refinitiv poll of analysts.
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(Reporting by Charles Regnier; Editing by David Goodman)