The CEO of Frontline Ltd. (NYSE: FRO) told Reuters that the demand for oil tankers is unexpectedly high right now as imports to China swell. This could be good news for other tanker lines like Nordic American Tankers Ltd. (NYSE: NAT) and Teekay Corp. (NYSE: TK).
Saying that Frontline is “seeing an incredible amount” of contracts from the Persian Gulf, day rates have risen to $25,000-$30,000. That’s better than a doubling in just over a week.
The sudden jump in cargoes could be due to escalating tensions between Europe and Iran, with China taking Iranian crude at a lower price and adding to its inventories before the full effect of the sanctions hits Iran later this year.
Frontline’s shares are up nearly 7.5% at $5.90 in a 52-week range of $2.52-$25.09. Nordic American shares have jumped more than 5% to $14.41 in a 52-week range of $11.58-$25.89, and Teekay shares are up just over 1% at $30.62 in a 52-week range of $20.67-$37.93.