Weak European oil demand during virus outbreak pressures suezmax and aframax tankers

The fortunes of VLCCs and their smaller peers have begun to diverge as weak European oil demand takes its toll.

Despite recent weakness following a surprise Saudi cut of crude output, spot VLCC earnings have stayed mostly above $10,000 per day since December.

In contrast, suezmax and aframax earnings have struggled to cover their operating expenses.

Analysts said the relative weakness of smaller tankers lies in the slow oil demand recovery in Europe, where some countries have imposed fresh lockdown measures to control the spread of coronavirus.