(Yicai Global) April 30 -- As international crude oil prices plunge from the Covid-19 pandemic the surge in oil storage demand has pushed up crude oil freight rates, and China's two major ocean-going oil transport giants both recorded stellar growth in the first quarter.

Shanghai-based China Merchants Energy Shipping posted CNY4.6 billion (USD648.5 million) revenue in the period, up 24.5 percent over last year, and its net profit attributable to shareholders jumped 262.4 percent to CNY1.3 billion, according to its performance report released yesterday.

Shanghai-based COSCO Shipping Energy Transportation’s revenue gained 5.7 percent to CNY4.1 billion in the first quarter and its net profit attributable to shareholders vaulted almost 47 percent to CNY629 million (USD89 million), it said in the report it also issued yesterday.

China Merchants Energy Shipping had 51 very large crude carriers and 5 Aframax tankers, and COSCO Shipping Energy owned 52 VLCCs and 6 Aframax tankers as of the end of last year, public information shows.

A VLCC’s crude oil load is generally more than 300,000 tons, equal to about 2 million barrels, while the capacity of Aframax tankers is about 100,000 tons.

Global daily oil demand fell by 2.5 million barrels in the quarter because of the coronavirus outbreak, while the failure of the major oil-producing countries to reach an agreement early last month torpedoed oil prices and expanded the long-term premium price of crude oil. Thus, the market demand for oil storage swelled and tanker freight rates rose sharply and stayed high in the first three months, COSCO Shipping Energy said in its report.

The average daily income of a VLCC in the Middle East to the Far East route jumped to about USD74,869 in the first quarter, up over one and a half times from USD27,948 in the same period last year, according to COSCO Shipping Energy.

China Merchants Energy Shipping's tanker fleet gained CNY2.8 billion revenue in the period in a CNY1.2 billion rise over last year, and its net profit climbed CNY991 million to CNY1.2 billion, the company said in its report. Its crude oil transport sector greatly contributed to its overall performance.

China Merchants Energy Shipping’s shares [SHA:601872] closed down 4.1 percent at CNY6.79 (97 US cents) at noon, while COSCO Shipping Energy Transportation [SHA:600026] ended down 0.7 percent at CNY8.55, likely because the market foresees little probability of an encore performance in the second quarter since the world’s oil tank is now full, and insipid demand going forward holds forth scant hope of it draining any time soon, the more so as China's crude oil imports grew 5 percent to 130 million metric tons in the quarter.

Editor: Ben Armour