VLCC owners slow steaming vessels to cut excess tonnage

Some owners of VLCCs are resorting to slow-steaming to stem the oversupply of tonnage in the Persian Gulf market, which has seen freight rate on voyages to North Asia plunging by almost 42% in the last two weeks shipping sources said Thursday. "Almost all owners are trying to steam [the ships] slow at the moment except the time-chartered vessels," a source with an Asian refiner said. The ample availability of vessels for trading for July loading out of the Persian Gulf has brought the freight rates under pressure and shipowners, by steaming their vessels slow, are trying to cut the supply of tonnage in the market. "Slow steaming is a reasonable thing to do under these circumstances," a source with a VLCC shipowner said.    The freight rate on the key Persian Gulf-East voyage has fallen from 108 Worldscale points assessed on June 23 to Wednesday's close of w63, a drop of w45 points. "The market is getting worse and owners are not necessary in a hurry to arrive in the Persian Gulf now," a VLCC broker said. According to one shipping source, it is mostly Asian owners who are steaming their VLCCs slow back to the Persian Gulf. "With this sort of market, definitely that [slow steaming] would be the most logical [thing to do]," another source with a VLCC owner said. Meanwhile, a chartering source said slow steaming may not change the current tonnage position in the market. "Slow steaming will not change the market situation. The vessel's expected time of arrival will be delayed by just two days," the chartering source said, adding that this may not drastically alter the availability of tonnage in the Persian Gulf.