Bermuda-based oil shippers are seeing their income rocket as oil tanker rates surge.

Increased production in Saudi Arabia and Iraq, as well as relatively low oil prices encouraging major buyers like China to hoard crude, are driving a spike in demand for the ships.

Companies including Nordic American Tankers, Frontline and Teekay Tankers are benefitting from the highest spot market charter rates for more than six years.

Teekay, which operates a fleet of 32 tankers of various sizes, announced first-quarter profits of $39 million on Thursday.

Teekay’s chief executive officer Kevin Mackay said it had been “the strongest quarter in six years”.

“Over the past four months, crude spot tanker rates have achieved the highest average levels since the strong winter market of 2008,” Mr Mackay said.

“The continued strength in the tanker market reflects the strong tanker market fundamentals on the back of a shrinking mid-size tanker fleet, increased crude oil trade volumes and growing global oil demand.

“Low global oil prices, high crude oil supply, and seasonal factors such as increased oil demand and winter weather delays, have provided further support to the crude tanker market during the first quarter.”

Nordic American Tankers (NAT) has a fleet of 24 Suezmax tankers, each of which can hold about one million barrels of oil. Last week, it also reported strong first-quarter earnings. NAT needs a charter rate of $12,000 per day to break even — in the first quarter its average charter rate for a ship was $37,000, compared to $24,000 in the same period last year.

Saudi Arabia has led efforts by the Organisation of Petroleum Exporting Countries (Opec) to increase production in spite of a falling crude price in order to defend market share against US shale oil, which is more expensive to extract.

Last month, the Saudis produced about 10.3 million barrels a day, close to the highest level in three decades.

The glut of oil has driven prices down and encouraged stockpiling. Some investment banks have been leasing tankers to store oil to be sold at a profit in the future.

Meanwhile, China has been topping up its strategic petroleum reserves. Last month, the nation bought the equivalent of 7.4 million barrels a day, rising almost 17 percent from March.

Also serving to widen the tanker operators’ profit margins is the 50 per cent fall in the price of bunker fuel that the tankers burn over the past six months.

The situation marks a dramatic change from last summer when many oil shippers were struggling, as the surge in US domestic oil production has reduced demand for shipping to North America.

Last July, Bermuda-based Windsor Petroleum Transport Corp filed for bankruptcy. Frontline managed to survive after restructuring its debt.

But today’s market is much healthier for the numerous Bermuda tanker operators.

“The world is flowing over with oil, which is good for the ones transporting it,” Eirik Haavaldsen, an analyst at Pareto Securities AS in Oslo said on Friday. “This is the weakest point of the year when crude tanker rates are usually at their lowest.”