The tanker market has never been so strong, according to Herbjørn Hansson Chairman & CEO of Nordic American Tankers (NAT).
The company, which owns and operates Suezmax tankers, is cashing in on the market bonanza and unprecedented demand for floating storage.
Namely, big oil companies the likes of Exxon, Shell, BP and Equinor are scrambling for storage capacity as demand for oil dwindles during the pandemic.
However, the big oil companies are buying oil at record low prices and storing it as they are hoping demand will pick up once the COVID-19 lockdown measures start to get lifted.
As such, NAT’s tankers have been in high demand.
Speaking to CNBC , Hansson said that at the moment one of its Suezmaxes can be hired for $ 70,000 per day for six months and that operating costs for one of its ships equal to $ 8,000 per day, leaving quite an impressive profit for the shipowner.
“I have never seen such a strong market in my lifetime, and I have been around for quite a while,” he said, commenting on the market situation.
As explained by Hansson, the black swan event has been very profitable for the company, boosting its balance sheet and dividends tremendously.
Dividends have been a priority for NAT, as the company doesn’t have much debt and plans to become debt-free again soon.
In March 2020, NAT said that the dividend for the first quarter of 2020 would be double the dividend of the last quarter of 2019, rising from 7 cent to 14 cent amid strong gains from the market.
Due to the strong market and the company’s strong financial position, NAT also launched a two-year share buy-back program covering up to 4.5 mill NAT shares .