“Smaller product tanker rates, the 45,000 to 50,000 tonne refined products carriers, are probably down $10,000-$15,000 a day from a year ago. Crude tankers haven’t suffered as much, probably $10,000 a day. So we are talking $25,000 to $30,000 for product tankers, coming down to maybe $15,000 a day for the small product tankers,” he said.
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Shivakumar also noted that the usual seasonal boost to rates during winter has not materialised this year, adding to the pressure.
For Suezmax crude tankers, capable of carrying one million barrels of oil, rates have declined from about $45,000 per day a year ago to $30,000–$35,000 per day currently.
Across segments, tanker freight rates have seen a year-on-year drop of roughly $10,000 per day.
“It’s down to oil demand, specifically, transportation fuel demand has been pretty poor. So diesel and petrol demand worldwide and in the three large blocks, which is China, EU and US, are negative growth year on year. So that’s a little bit of a concern, whether there’s an underlying problem, and whether that will get sorted out,” he said.
Talking about the outlook for offshore rigs and their deployment Shivakumar explained that the drilling business is localised and that regional factors, such as the US onshore shale market, may not significantly impact offshore rigs.
The cancellation of a tender for two jack-up rigs deployed with ONGC is also not expected to affect the company’s performance in the second half.
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Shivakumar explained that one of the rigs, initially bid for the cancelled tender, is now on a short-term contract, providing employment for at least the next four months with options for extension. While this may have implications for the following year, additional tenders are expected, which could mitigate any longer-term impact.
The company, which has a market capitalisation of ₹15,241 crore, has seen its shares rise 12% over the last year.
