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Why this tanker shipping depression is different from past slumps

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Shipping busts can be even more exciting than shipping booms. When spot rates crash, debt comes due, vessels are arrested, bankruptcies pile up and vultures swoop in. But not all shipping collapses are so action-packed. Sometimes things never devolve into total crisis mode. Sometimes the market gets stuck in limbo — like tankers are now.

Yet there has been no wave of distress tanker sales or bankruptcies, as seen in past slumps. Tanker owners in the current downcycle had pared their financial leverage over the past decade and refilled cash cushions on strong rates in late 2019 and early 2020.

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