Worldscale News

The cost of chartering a supertanker to load Middle Eastern crude oil for Asia has rebounded from a 19-month low in September, but industry sources expect output supply cuts, led by Saudi Arabia, to cap freight rates for the rest of the year.The world's benchmark very large crude carrier (VLCC) export route from the Middle East Gulf (MEG) to Japan, known as TD3, rose to W50.46 on Monday in the Worldscale measure of freight rates, LSEG data showed. It fell to W35.60 in September…

The costs of chartering supertankers to move crude oil from the Middle East to Asia have jumped to the highest since April as more cargoes are being booked in June, according to industry sources and data on Refinitiv Eikon.The rate for a Very Large Crude Carrier (VLCC) from the Middle East to China, Japan and Singapore is assessed at just above worldscale 80 on Thursday, according to shipbroking firm Meiwa International, the highest levels since April. Worldscale (W) is an industry…

Buyers of Russian oil have faced difficulties over payments and availability of vessels after imposition of Western sanctions against Moscow over Ukraine, traders said on Monday, while BP Plc has canceled fuel oil loadings from a Black Sea port.The West has introduced sweeping sanctions, including on the banking sector, after Russia's invasion of Ukraine. Russia calls its action a "special operation" to disarm Ukraine.The United States and its allies on Saturday moved to block certain Russian banks' access to the SWIFT international payment system that helps international trade flow smoothly.

Oil tanker rates are soaring globally as traders scramble to cope with jitters over possible disruption in Russian supplies, as well as war risk premiums for ships plying the Mediterranean region following Moscow's invasion of Ukraine.Shipowners are also grappling with higher fuel costs after oil prices soared nearly $2 per barrel on Friday, with Brent back above $100. The global energy sector is concerned that Europe and the United States may impose sanctions on Russian exports and severely disrupt supplies.

The Suez Canal stepped up efforts on Friday to free a giant container ship blocking the vital trade waterway that has sent shipping rates for oil product tankers soaring and disrupted the global supply chains for everything from grains to baby clothes.Shipping rates for oil product tankers have nearly doubled after the 400 meter long Ever Given, almost as long as the Empire State Building is high, ran aground in the canal on Tuesday.Efforts to free the vessel may take weeks and be complicated by unstable weather conditions…

PetroChina has provisionally chartered an Aframax tanker at a record U.S.-Europe freight rate, two shipbrokers said on Tuesday, reflecting strong demand for low-sulfur U.S. crude.The Chinese oil firm tentatively chartered the Aframax-class Seamagic for 300 worldscale points, loading in the U.S. Gulf Coast. The vessel currently is moored near Pascagoula, Mississippi, according to Refinitiv Eikon data.The rate translates to about $100,000 per day, one of the shipbrokers said, surpassing the previous peak of 245 worldscale points, or about $60,700 per day, last week. The broker said the crude is estimated to load by Jan. 4.PetroChina did not immediately respond to a request for comment.U.S.

Nearly 300 oil tankers globally have been placed off limits as companies fear violating U.S. sanctions against Iran and Venezuela, driving freight rates to new highs, industry sources said.The move has taken roughly 3% of the global oil tanker fleet out of the market, according to industry sources and data on Refinitiv Eikon, sending rates soaring to secure tankers to ship oil, particularly to Asia."Freight rates are going through the roof and people are getting very nervous with the cost of shipping…

About one-third of the oil tankers owned by COSCO Shipping Tanker (Dalian) have shut off their ship-tracking transponders since the United States imposed sanctions on the company for allegedly shipping Iranian crude, shipping data showed.From Sept. 30 to Oct. 7, a total of 14 COSCO Dalian ships, six of which carry some oil, stopped sending location data from their automatic identification system (AIS), ship tracking data on Refinitiv Eikon showed. The U.S. imposed the sanctions on Sept.

Late 2018 saw the tanker market bubble upwards through late November, with daily vessel hires moving in the direction of, though not yet reaching levels not seen since late 2014-2015, when oil prices were in freefall and inventories building to the brim. A few pundits have suggested that we are seeing a “mini 2014” where lowered oil prices are coaxing another inventory build which would drive tanker capacity utilization, and per diem freight inflows, higher. The oil market has changed over four years…

VLCC rates from MidEast to Asia gain around $3,000; higher chartering volumes for peak winter season could lift rates. Freight rates for very large crude carriers (VLCCs) on Asian routes may have found a floor this week as a combination of increased chartering activity and some tankers sailing at slower speeds pushed rates slightly higher from the Middle East. "Rates are at a bottom, they have kind of found a floor," said Ashok Sharma, managing director of BRS Baxi Far East in Singapore, on Friday. "But the recovery is a very shallow one - the market is really rubbish," he added. Charter rates from the Middle East to Asia gained about 3 Worldscale points on the week to Thursday equivalent to an extra $3,500 in daily earnings.

No impact on VLCC rates yet from Hurricane Harvey, even as rates for smaller product tankers double. Freight rates for very large crude carriers (VLCCs) on Asian routes continue to sink on a glut of available tonnage as owners wait for supply disruptions caused by Hurricane Harvey to help support the market, brokers said. Charter rates for VLCCs from the Middle East have fallen to around 36 on the Worldscale measure. "In terms of VLCCs we've not seen much knock-on effect (from Harvey) yet, but I'm sure there'll be some lasting effect," a Singapore-based supertanker broker said. Owners and brokers expect charterers to scramble to hire alternative ships to replace tankers whose loading and unloading schedules have been disrupted by the hurricane.

Freight rates for very large crude carriers (VLCCs) on Asian routes show little sign of reviving although Hurricane Harvey, which threatens to ravage the U.S. Gulf coast oil refining industry over the weekend, could provide a fillip, brokers said. That came as average weighted VLCC freight rates on all routes sank to their lowest in four years this week to around $9,000 per day. Rates are even lower on some routes after CPC fixed a VLCC late Thursday for a trip from the Middle East to Taiwan at 36.75 on the Worldscale measure and S-Oil fixed a VLCC to South Korea at W36.

Mideast demand especially strong due to refinery outages. Rates for tankers carrying refined fuels like gasoline and diesel have soared this month as trade activity picked up and caused a supply crunch in ships, several shipbrokers and traders said. The high rates indicate strong consumer fuel demand due to the persistently low crude oil prices that have resulted from years of oversupply, refiners said. "Our order books are pretty good. Whether it's gasoline for cars or diesel for industry, we're receiving calls to ship more fuel," said one shipper based in Singapore. Rates for medium-range (MR) tankers carrying about 30,000 tonnes of oil products like gasoline…

Around 90 ships charter free for early September loading. Freight rates for very large crude carriers (VLCCs) on Asian routes will remain under pressure for at least the next month, facing strong headwinds from a glut of tonnage, brokers said. "There are around 80 to 90 ships available for charter in the first 10 days in September - that's about three ships for every cargo," a Singapore-based supertanker broker said on Friday. "There are about six or seven VLCCs free for charter now, but the earliest they'll see any cargo is early September," he said. That came as owners were attempting to resist moves by Chinese oil trading house Unipec to push rates lower on its latest charter.

About 20 MidEast VLCC still to be fixed for August. Freight rates for very large crude carriers (VLCCs) on Asian routes may have finally bottomed as owners attempt to resist moves by charterers to push rates still lower, brokers said. "This is a really bad market now. The floor keeps getting lower but I think there's now resistance by owners," said a Singapore-based supertanker broker on Friday. That came as VLCC rates from the Middle East averaged around 42 on the Worldscale measure this week, a new low for this year and lower in equivalent earnings than 2016. "VLCC owners now only have one quarter left to make it up but even if average global VLCC rates go up to $30…

Freight rates for very large crude carriers (VLCCs) on Asian routes from the Middle East could fall to a new low for the year next week as too many ships chase the number of available cargoes, ship brokers said on Friday. That came as average rates from the Middle East to Asia have fallen close to last year's low. Average rates dropped to around 32.50 on the Worldscale measure on Sept. 23, 2016, equivalent to about 42.75 this year after Worldscale rates were recalculated for 2017.

Rates fall back after climbing earlier in the week. Overcapacity, OPEC cuts, little scrapping, summer lull weigh on market. Owners of modern very large crude carriers (VLCCs) could see a gain in charter rates amid tightening vessel supply but freight rates, especially for older and newly delivered ships, will remain under pressure, brokers said on Friday. That came as rates rebounded slightly earlier this week on routes from the Middle East only for them to fall back to last week's levels by Friday. Rates hit around 53 on the Worldscale measure after Unipec fixed four VLCCs at around W51-52. "We did see a slight upward correction but rates have fallen off again," said a Singapore-based supertanker broker. That came after S-Oil and Thai Oil fixed VLCCs at W43 and W44.50 on Thursday.

Rate correction likely after low S-Oil charter drags market. Freight rates for very large crude carriers (VLCCs) could see a small respite next week, building on the slight improvement seen in the last two days although sentiment is likely to remain pessimistic of any real recovery, brokers said on Friday. "There was a large drop on Tuesday when South Korea's S-Oil fixed at 45.50 (on the Worldscale measure). But rates are now correcting," a Singapore-based supertanker broker said. Hong Kong tanker owner Associated Maritime is thought to have fixed 10 VLCCs to Unipec for contracts of affreigtment in the middle of August. "That might signal Unipec doesn't have any vessels and it expects rates to rise," the broker added. "I feel we're not too far off the bottom.

Floating storage, West Africa cargoes support rates; further storage charters may push rates to W60. Freight rates for very large crude carriers (VLCCs), which were supported this week by a shift to using older vessels for floating oil storage, have plateaued at current levels but could nudge higher on further storage plays, brokers said on Friday. Rates from the Middle East to Asia are currently around 50 on the Worldscale measure and W55 from West Africa to Asia depending on vessel age and actual destination, brokers said. "Rates haven't peaked, they have plateaued," said Ashok Sharma, managing director of shipbroker BRS Baxi in Singapore. "Depending how the storage play plays out rates could touch W60 - not next week.

Trafigura hires five VLCCs to store oil; short-term storage a profitable play. Freight rates for very large crude carriers (VLCCs) could creep higher as more ships are chartered for floating storage and crude oil shipments increase ahead of the northern winter, brokers said. "There might be a slow creep up towards 60 (on the Worldscale measure)," said Ashok Sharma, managing director of ship broker BRS Baxi in Singapore on Friday. "W60 is at least on the horizon. Rates from West Africa to China are already at W56," he added. That came as VLCC rates from the Middle East to Asia gained around 3 Worldscale points since last Thursday, buoyed by growing interest from traders seeking to charter vessels to store oil for one to three months. "The storage play has gained traction.

MidEast-Asia rates likely to remain flat until August; paper derivative trades show no uptick until October. Freight rates for very large crude carriers (VLCCs) are likely to remain flat next week, a situation that could well last until August, brokers said on Friday. "Rates are stuck. I don't see there being any hope for July cargoes. Similar rate levels are probably here for August cargoes," a Singapore-based supertanker broker said on Friday. Current pricing of VLCC derivative futures for the Middle East-Japan route stood at 52.50 on the Worldscale measure for July. That falls to W49.75 for August, W49.50 for September and W54.50 in October. "That indicates much of the same rates story we've got now," the broker said. "There's been bits and bobs of chartering activity this week.

Middle East rates helped by fewer old vessels; about 96 MidEast cargoes fixed, 25 to come. Freight rates for very large crude carriers (VLCCs) could rise next week on firm sentiment in the Middle East and West Africa markets but higher oil prices and fewer floating storage opportunities could cap increases, brokers said on Friday. "Middle East rates to the east have crept up one or two points (on the Worldscale measure)," said Ashok Sharma, managing director of BRS Baxi in Singapore. "Rates are up to W52.50 today. There is a slightly firm undertone," he added. Rates from the Middle East are being partly supported by fewer older vessels that would otherwise discount charter rates due to age and plenty of cargoes from West Africa, brokers said. "Rates from West Africa are showing resilience.

Charterers set to split VLCC cargoes if owners push rates higher. Freight rates for very large crude carriers (VLCCs) are coming under pressure from a build up in ships waiting for new charters and depressed rates in smaller tanker sizes, brokers said on Friday. "At the slightest attempt by owners to push rates higher, charterers can split the cargo into Suezmax cargoes for the same rate," an European supertanker broker said on Friday. A VLCC can carry around 2 million barrels of oil while a Suezmax tanker can transport about 1 million barrels. "I am surprised VLCC owners have kept the rates up for so long. Last week I would have predicted rates to drop. There is no sign of an improvement," the broker added.