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 Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter June 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Tanker Trends

VL-exit?

Earlier this week spot returns in the VLCC market touched their lowest level since October 2014, with TCE earnings for Middle East/Japan (TD3) falling close to $20,

RS Rules Conform to the IMO Goal-based Standards

The rules of the Russian Maritime Register of Shipping are in conformity to the International Maritime Organization (IMO)goal-based standards (GBS), the IMO’s Maritime

Asia Tankers-VLCC Rates to Climb Slowly

Around 47 MidEast charters fixed for July loading so far; older tonnage and new vessels a drag on freight rates. Freight rates for very large crude carriers

Ports

Panama Canal Officially Opens $5.25Bln Expansion

A 984-foot Chinese container ship was greeted with fireworks and cheers from a crowd that had gathered, when it made an inaugural passage through the newly expanded Panama Canal on Sunday,

The Historical Passage of Cosco Shipping Panama

The Chinese giant Cosco Shipping  has made the inaugural transit on Sunday June 26, 2016  through the expanded Panama Canal expansion project , event appreciated

MPA to Enhance Collaboration with Rotterdam Port

Chief Executive of the Maritime and Port Authority of Singapore (MPA), Andrew Tan, attended the second Port Authorities Roundtable (PAR) in Rotterdam.    Hosted

 
 
Maritime Contracts Maritime Security Naval Architecture Navigation Offshore Oil Pipelines Salvage Ship Electronics Shipbuilding / Vessel Construction Sonar
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: 0.0662 sec (15 req/sec)