Persian Gulf tanker rates may halt 13-day slide
The cost of shipping Middle East crude to Asia, the world's busiest route for supertankers, may end a 13-day slump because returns from leasing vessels have fallen below levels where owners make a profit.
The average very large crude carrier, or VLCC, earns US$29,749 a day after fuel and port costs, according to data from the London-based Baltic Exchange, whose daily price assessments are viewed by traders as the market benchmark. Frontline Ltd, the largest owner of the ships, said on May 22 it needs US$31,500 a day to break even for such vessels.
'There is no great push' by oil companies to get ship-rental rates significantly lower, Charlie Fowle, a director at London-based shipbroker Galbraith's Ltd said in an e-mailed note yesterday. Owners ordered captains to slow tankers down to cut fuel costs, three shipbrokers including Mr Fowle said on Aug 5.
SK Energy Corp, South Korea's largest oil refiner, hired the tanker Marbat at 90 Worldscale points, according to a report yesterday from Athens-based Optima Shipbrokers. That's almost the same as the London-based Baltic Exchange's benchmark assessment of 90.16 points for a cargo to Japan.
Worldscale points are a percentage of a nominal rate, or flat rate, for more than 320,000 specific routes. Flat rates for every voyage, quoted in US dollars a ton, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.
Each flat rate assessment gives owners and oil companies a starting point for negotiating hire rates without having to calculate the value of each deal from scratch.
A rate of 90.16 points works out at daily earnings of US$27,989 for shipments to Asia. Longer-distance US cargoes pay a rate of US$31,510 a day. Globally, average rental income is US$29,749, according to the exchange.
The average very large crude carrier, or VLCC, earns US$29,749 a day after fuel and port costs, according to data from the London-based Baltic Exchange, whose daily price assessments are viewed by traders as the market benchmark. Frontline Ltd, the largest owner of the ships, said on May 22 it needs US$31,500 a day to break even for such vessels.
'There is no great push' by oil companies to get ship-rental rates significantly lower, Charlie Fowle, a director at London-based shipbroker Galbraith's Ltd said in an e-mailed note yesterday. Owners ordered captains to slow tankers down to cut fuel costs, three shipbrokers including Mr Fowle said on Aug 5.
SK Energy Corp, South Korea's largest oil refiner, hired the tanker Marbat at 90 Worldscale points, according to a report yesterday from Athens-based Optima Shipbrokers. That's almost the same as the London-based Baltic Exchange's benchmark assessment of 90.16 points for a cargo to Japan.
Worldscale points are a percentage of a nominal rate, or flat rate, for more than 320,000 specific routes. Flat rates for every voyage, quoted in US dollars a ton, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.
Each flat rate assessment gives owners and oil companies a starting point for negotiating hire rates without having to calculate the value of each deal from scratch.
A rate of 90.16 points works out at daily earnings of US$27,989 for shipments to Asia. Longer-distance US cargoes pay a rate of US$31,510 a day. Globally, average rental income is US$29,749, according to the exchange.