In the latest sign that the world is simply running out of capacity when it comes to coping with an inexorable supply of commodities,three diesel tankers en route from the Gulf to Europe did something rather odd on Wednesday: they stopped, turned around in the middle of the ocean, and headed back the way they came!
“At least three 37,000 tonne tankers – Vendome Street, Atlantic Star and Atlantic Titan – have made U-turns in the Atlantic ocean in recent days and are now heading back west,” Reuters reported, citing its own tracking data.
The Vendome Street actually made it to within 800 miles of Portgual (so around 75% of the way there) before abruptly turning around. “Ship brokers said a turnaround so late in the journey would come at a cost to the charterer,” Reuters notes.
The problem: low prices, no storage capacity, and soft demand.
Soon, we will see another “environmental disaster” involving one or more of these ‘parked’ supertankers. Because a ship must be lost, before the insurance can be claimed…
It will happen -- a watershed moment in the ongoing collapse of the international commodities market. The Baltic Dry Index has repeatedly set record lows this year, and it just continues to plummet. Soon we will see how many fleet owners are not above the option of scuttling a portion of their fleet for its insured value, in order to maintain their corporate liquidity.
Financial desperation is surging like a tsunami, and soon that wall of debt and deflation will innundate both Wall Street and Main Street…
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