The cost of shipping Middle East oil to Asia, the world’s busiest route for supertankers, fell for a seventh day as an excess supply of vessels cut the amount owners could charge for charters.Charter rates for very large crude carriers, or VLCCs, on the industry’s benchmark Saudi Arabia-to-Japan route dropped 0.3 percent to 49.92 Worldscale points, according to the Baltic Exchange in London. Returns from the voyage, which take fuel- cost changes into account, declined 11 percent to $2,272 a day, the lowest level since Oct. 8, Bloomberg reports.
“The tonnage list refuses to shrink,” Erik Nikolai Stavseth, an analyst at Arctic Securities ASA in Oslo, said by e-mail today. Any recovery in charter costs “appears to be put on hold” until the vessel glut decreases “radically,” he said.
The VLCC fleet’s transportation capacity will expand by 6.9 percent this year to 172 million deadweight tons, according to data from Clarkson Research Services Ltd., a unit of the world’s biggest shipbroker. That would be more than double the 2.8 percent increase in demand it predicts.
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 U.S. 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.
The Baltic Dirty Tanker Index, a measure of crude-oil transportation costs that includes vessels smaller than VLCCs, rose 1 percent to 844 points, according to the Baltic Exchange.
“The tonnage list refuses to shrink,” Erik Nikolai Stavseth, an analyst at Arctic Securities ASA in Oslo, said by e-mail today. Any recovery in charter costs “appears to be put on hold” until the vessel glut decreases “radically,” he said.
The VLCC fleet’s transportation capacity will expand by 6.9 percent this year to 172 million deadweight tons, according to data from Clarkson Research Services Ltd., a unit of the world’s biggest shipbroker. That would be more than double the 2.8 percent increase in demand it predicts.
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 U.S. 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.
The Baltic Dirty Tanker Index, a measure of crude-oil transportation costs that includes vessels smaller than VLCCs, rose 1 percent to 844 points, according to the Baltic Exchange.