Frontline locks in $235m VLCC windfall as rates hit 15-year high
Frontline secures four VLCC charters at up to $120,000 per day, capitalising on a red-hot market.
Frontline, the tanker giant backed by shipping magnate John Fredriksen, has secured long-term charters for four very large crude carriers (VLCCs) at historically high rates, capitalizing on the current market surge. The company has locked in earnings for two newly delivered vessels at $120,000 per day for one-year terms, with both ships joining its fleet in June and July.
In addition to the newbuilds, Frontline has fixed two older VLCCs, built in 2016, under extended contracts starting in August. One vessel has been chartered for two years at an average of $90,000 per day, while the other secured a three-year deal at $75,000 per day. The combined minimum duration of these four agreements represents approximately $235 million in gross contracted revenue. The charterers involved in the deals were not disclosed.
Multi-year deals at record rates: Frontline
The latest agreements reflect a broader strategy shift at Frontline, which has prioritized securing long-term earnings visibility amid soaring freight rates. Earlier this year, the company fixed seven VLCCs for one-year terms at an average of $76,900 per day, a level CEO Lars Barstad described as unseen in decades. The current market has only strengthened since then, with Frontline’s VLCCs earning an average of $152,700 per day in the spot market during the second quarter. For the third quarter, 86% of available VLCC days have already been booked at $156,900 per day.
Frontline
Barstad emphasized the company’s focus on locking in revenue at these unprecedented levels. The strategy has contributed to Frontline’s strongest quarterly financial results on record, with second-quarter profits reaching $659.2 million. Beyond charter deals, the company has also moved to capitalize on high asset values, selling two 2017-built VLCCs in July for a combined $270 million.
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