Tankers steered back from the brink

A recent spike in rates has rescued tanker owners, but the reprieve could be short-lived

Crude and product tanker owners hemorrhaged cash in the first three quarters of 2018, then pulled out of their slump in the fourth as spot freight rates surged. Any threat that oil shippers' tanker counterparties could go bankrupt and default on their obligations has been alleviated—at least for now. Crude tanker owners' reserves were fattened by very strong years in 2015-16, but excessive newbuild orders caused freight pricing to fall much more steeply than expected in 2018. Jonathan Chappell, a shipping analyst at investment bank Evercore ISI, described 2018 in a year-end client note as having "the worst three-quarter start to any year in many decades". At an investor event in New York in