Mideast Oil Exports Needed To Pull VLCC Rates Up

Friday, November 19, 1999
A resumption in Middle East oil exports to the U.S. is required to drag VLCC tanker rates off the floor, shipping brokers said. A late start to seasonal westbound oil shipments from the Middle East is making tanker brokers ask when relief will arrive. VLCC tanker rates out of the Middle East have nose-dived again in the last two weeks due to a lack of activity, to around W42 east (around $4 per ton) and west (about $7.00 per ton). Even when there has been strong tanker demand from Asia over the last month, large tanker rates have failed to take off because of the lack of oil going west, brokers said. "It is a simple formula. The Red Sea-East journey is much shorter than to the West, and allows a build up of vessels returning to the Middle East. The result is rates nose-dive," one broker said. Broker E.A. Gibson said in its latest weekly report that up to 82 vessels of 23 million tons could become available in the Middle East over the next four weeks. "All the additional oil has been heading east," analyst Roy Mason at Oil Movements said. "There is only about four weeks left for westbound winter season cargoes to be fixed, so it's got to happen soon," Mason said. "If it doesn't the winter will get very hectic," he added. Surplus Shipping Capacity The squeeze on U.S. imports has been tightened by the Brent/WTI arbitrage hovering at levels far too narrow to bring in incremental North Sea barrels over the last two months, according to oil traders. The last VLCC to sail from Sullom Voe to the U.S. Gulf was the Atlantic Liberty, which loaded on Sept. 15. Asian refiners have also been snapping up West African crudes - taking up to 1.2 million barrels a day in November and an expected one million a day in December, traders said. Mason said the first signs of a swing towards increased Mideast-West sailings were beginning to show up in the quantities of seaborne oil. Iraqi exports are also expected to resume on November 20 provided there is no delay to the implementation of the next phase of U.N. "oil for food" sales. Brokers reported on Tuesday a VLCC fixture to the U.S. Gulf from Iraq for September 19 going to Russian trader Ursa. However, longer term most brokers said any recovery in rates will remain limited because surplus shipping capacity will continue into next year. Seven VLCC tankers have been reported sold for scrapping in the past two weeks, taking the total this year to 31, according to brokers. But more ships need to be taken out of the market before a sustained recovery is possible, most analysts agree. - (Paul Berrill, Reuters)
Maritime Reporter March 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Tanker Trends

Pirates Approach Tanker in Bab El Mandeb

The U.S. Navy Maritime Liaison Office in Bahrain (MARLO) has advised that on or about 12:30 UTC on 14 April, the Master of an oil tanker reported being approached by a white-blue skiff in position 12.

Shippers Turn to Equity Markets as Sector Eyes Recovery

Shipping companies are turning to equity markets to fill a growing funding gap, betting that investors hungry for decent returns will provide capital to a sector

YPF Tenders to Buy Fuel Oil for June

State-run oil company YPF launched its second fuel oil tender in April, this time to buy two 50,000 metric ton cargoes (some 375,000 barrels each) to be received

Ports

Canaveral Tops State List for Sand Bypass Funding

The Canaveral Harbor Inlet Sand Bypass Project has earned the top state ranking for 2014/15 inlet management funding. As a result, Port Canaveral is expected to receive $100,

Rotterdam port's throughput almost stable

The Port of Rotterdam’s throughput in the first quarter of 2014, at 109 million tonnes, was 0.2% below the level for the corresponding period last year.Split up by goods type,

CMA CGM Strengthens Madagascar Presence

Since the creation of CMA CGM Madagascar in 2003, container shipping company CMA CGM Group has continued to develop on the island to move closer to its valued customers

 
 
Maritime Careers / Shipboard Positions Maritime Security Naval Architecture Pipelines Pod Propulsion Salvage Ship Repair Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1326 sec (8 req/sec)