Spot demand for supertankers carrying Middle East crude oil surged to a record high of as much as 137 fixtures in November, representing 9.13 million barrels of oil per day, ship brokers said on Monday, Reuters reports. The unprecedented activity in the spot tanker market is not driven by any significant increase in OPEC production, but by oil companies looking to take advantage of rock bottom freight rates in an oversupplied market.
Tokyo-based ship broker Meiwa International said the previous high for Middle East tanker booking was 124 fixtures of very large crude carriers (VLCCs), each capable of carrying 2 million barrels of oil, in July. It did not give an estimate for November.
"Whether this will be repeated for December remains to be seen. But as the past couple of months have been very busy, it wouldn't be unreasonable to expect 125-130 fixtures," said broker firm Marex Spectron, which estimated 137 fixtures for November.
Another brokerage firm, Charles R. Weber, counted 135 VLCC fixtures from the Middle East this month, most of them bound for Asia.
Oil companies have turned to the spot market instead of renewing long-term charter contracts, as a flood of new VLCCs provides the industry with assurances that tanker supplies will be more than ample for the foreseeable future.
"Redeliveries from time charterers into the spot market compound a fleet growing from a wave of newbuildings," Weber said.
"Thus, it makes sense that the number of monthly VLCC cargoes, which have materialized in the spot market in recent months, have risen with little significant affect on spot market earnings."
Crude oil tanker earnings on the Baltic Exchange's benchmark Middle East route have recovered in the last few weeks, trading at $10,479 on Friday, after tumbling to a record low of -$6,492 a day in late September.
The market has traded in negative territory for the majority of the last three months, meaning ship owners on average were pocketing less in revenue than they were spending to operate their vessel.
Tokyo-based ship broker Meiwa International said the previous high for Middle East tanker booking was 124 fixtures of very large crude carriers (VLCCs), each capable of carrying 2 million barrels of oil, in July. It did not give an estimate for November.
"Whether this will be repeated for December remains to be seen. But as the past couple of months have been very busy, it wouldn't be unreasonable to expect 125-130 fixtures," said broker firm Marex Spectron, which estimated 137 fixtures for November.
Another brokerage firm, Charles R. Weber, counted 135 VLCC fixtures from the Middle East this month, most of them bound for Asia.
Oil companies have turned to the spot market instead of renewing long-term charter contracts, as a flood of new VLCCs provides the industry with assurances that tanker supplies will be more than ample for the foreseeable future.
"Redeliveries from time charterers into the spot market compound a fleet growing from a wave of newbuildings," Weber said.
"Thus, it makes sense that the number of monthly VLCC cargoes, which have materialized in the spot market in recent months, have risen with little significant affect on spot market earnings."
Crude oil tanker earnings on the Baltic Exchange's benchmark Middle East route have recovered in the last few weeks, trading at $10,479 on Friday, after tumbling to a record low of -$6,492 a day in late September.
The market has traded in negative territory for the majority of the last three months, meaning ship owners on average were pocketing less in revenue than they were spending to operate their vessel.