Tanker Rates Continue To Soar

Modern vessel shortages in the North Sea are pushing Aframax and Suezmax tanker rates to year high levels. Rates for Aframax 80,000 ton vessels have repeated the year-high of W217.5($8.00 per ton) for late month U.K./Continent liftings, but brokers said June business was now played out. One million barrel Suezmax tankers were benefiting strongly from bouyant North Sea markets with transatlantic rates climbing steeply to W165-W180. "There is a self-fueling cycle with each sector supporting the other in turn," a broker said. Attempts to replace Aframaxes with Suezmaxes after a number of the smaller ships were taken out of the short North Sea market for transatlantic crossings last month has put pressure on both. The 159,681 dwt Iran Susangird was reported chartered as a stop-gap for a late June UK/Continent 80,000 ton cargo, brokers said. Suezmaxes also continue in short supply due to U.S. demand for one million barrel ships in West Africa and rates have jumped again to as high as W170 ($15.50 per ton). But an opening spread against VLCCs was expected to increase demand for the larger tankers, brokers said. A West Africa VLCC was said booked on subjects at W130 for the U.S. ($11.75 per ton) - up from W110 ($10.00) last week. In the Mediterranean, Suezmaxes were retaining levels around W150 ($5.00 per ton) after a flurry of prompt Ceyhan liftings reported last week. "There could be some calming due to reported problems with next phase Iraqi oil contracts, but the bigger numbers should return when Ceyhan liftings come through again," a broker said. Middle East VLCC fixing was also increasing but rates were largely unchanged with Japan still at about W110 ($11.85 per ton) and the U.S. Gulf W90 ($15.50 per ton). But July liftings are expected to exceed those for June and put upward pressure on rates, brokers said.