Mid-East tanker rates decline on vessel surplus
The cost of shipping Middle East crude to Asia, the world's busiest oil-transit route, fell to a three-month low on excess tanker capacity.
Oil companies such as ExxonMobil Corp and Total SA that charter supertankers have confirmed 40 bookings in the past 10 days, compared with seven in the preceding 10 days, according to a report e-mailed on Thursday by Paris-based shipbrokers Barry Rogliano Salles.
That still leaves enough vessels to handle the remaining August shipments, according to the report.
'Even with the upturn in bookings over the past week, the remaining excess of ships is likely to keep rates pinned down over the next couple of months,' Tim Coffin, head of research at London-based Capital Shipbrokers LLP, said in an e-mail message.
Shipowners may be losing money on the vessels they lease. Hire rates between the Middle East and Asia are about US$22,900 a day, compared with the US$29,500-a-day minimum needed by Frontline Ltd, the world's biggest oil-tanker company by capacity, to break even.
Freight rates between the Persian Gulf and Japan were at 55.5 Worldscale points on Thursday, the lowest since April24, according to London's Baltic Exchange. At 55.5 Worldscale points, owners of very large crude carriers, or VLCCs, can earn about US$22,916 a day on a 38-day round trip from Saudi Arabia to South Korea, based on Platou's formula.
Worldscale points are a percentage of a nominal rate, or flat rate, for a specific route. Flat rates, quoted in US dollars a tonne, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.
Bookings for supertankers sailing from the Middle East to Asia account for 47 per cent of global demand for the carriers, according to New York-based McQuilling Brokerage Partners LLP. US and Caribbean cargoes account for 14 per cent.
Oil companies such as ExxonMobil Corp and Total SA that charter supertankers have confirmed 40 bookings in the past 10 days, compared with seven in the preceding 10 days, according to a report e-mailed on Thursday by Paris-based shipbrokers Barry Rogliano Salles.
That still leaves enough vessels to handle the remaining August shipments, according to the report.
'Even with the upturn in bookings over the past week, the remaining excess of ships is likely to keep rates pinned down over the next couple of months,' Tim Coffin, head of research at London-based Capital Shipbrokers LLP, said in an e-mail message.
Shipowners may be losing money on the vessels they lease. Hire rates between the Middle East and Asia are about US$22,900 a day, compared with the US$29,500-a-day minimum needed by Frontline Ltd, the world's biggest oil-tanker company by capacity, to break even.
Freight rates between the Persian Gulf and Japan were at 55.5 Worldscale points on Thursday, the lowest since April24, according to London's Baltic Exchange. At 55.5 Worldscale points, owners of very large crude carriers, or VLCCs, can earn about US$22,916 a day on a 38-day round trip from Saudi Arabia to South Korea, based on Platou's formula.
Worldscale points are a percentage of a nominal rate, or flat rate, for a specific route. Flat rates, quoted in US dollars a tonne, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.
Bookings for supertankers sailing from the Middle East to Asia account for 47 per cent of global demand for the carriers, according to New York-based McQuilling Brokerage Partners LLP. US and Caribbean cargoes account for 14 per cent.