For the first time in 10 years, the last quarter of the year showed a weaker tanker market relative to the previous quarter, according to Bermudian-based oil tanker shipping company Frontline Ltd.

It reported a $9.2 million loss, or five cents per diluted share, for the three months to December, compared to a profit of $108.8 million for the same period in 2019.

Its adjusted net loss was $20.2 million, or 10 cents per share.

For the full year, Frontline had net income of $412.9 million, of $2.09 per share, compared to $139.9 million in 2019.

The company said that the first half of 2020 was positively impacted by the surprise Saudi Arabia oil output hike, “and then Covid-19 related demand shortfall triggering high demand for floating storage. In the second half of the year the tanker markets gradually weakened as we entered a period of oil inventory draws where demand for oil rose sharply, but freight demand growth was muted due to oil supply being constrained”.

Frontline owns a fleet of 60 tankers, of which 15 are VLCC [very large crude carriers], 27 are Suezmax tankers, and 18 are LR2/Aframax tankers.

Lars Barstad, interim chief executive officer of Frontline Management AS, said: “In 2020 Frontline recorded its strongest result since 2008, but the fourth quarter of the year reflect the challenging conditions tanker markets experience, as record volume of oil inventories are drawn.

“Global oil demand is growing firmly, and all leading commodity markets are pointing towards a strong recovery for the world economy in 2021. Demand for tankers is currently muted as the total volume of oil transported is capped. There are indications we may be near the end of the inventory draw cycle as OECD stock levels are approaching five-year averages.

“The strong development in oil prices implies real demand returning, most notably in Asia where we are close to pre-Covid-19 levels. When global oil markets switch from drawing on inventories, to call on equal volumes from the marketplace, growing demand for freight should be expected. At this point in the curve, we believe Frontline is well positioned to capture a recovery for tankers with our low cash breakeven levels and a spot exposed fleet of modern fuel-efficient vessels.”