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The cost
of shipping Middle East crude to Asia, the world's
busiest route for supertankers, may drop for a third day
as oil companies delay hiring the ships they need,
causing vessel supply to accumulate.
There
are 95 very large crude carriers, or VLCCs, available
for hire within the next 30 days, according to a report
today from Paris-based Barry Rogliano Salles. That
compares with 66 for hire in March at the end of last
month.
Oil
company officials are “holding back” cargoes “to weaken
owners’ morale,” Halvor Ellefsen, an Oslo-based tanker
broker at SeaLeague AS, said in an e-mailed note on
Tuesday. Still, hire rates shouldn’t fall much because
the supply of ships for hire is “not that scary.”
No new
tanker rentals were reported by shipbrokers on Tuesday.
The London-based Baltic Exchange’s assessment for
voyages to
Asia from the
Middle East, used to settle freight-derivative contracts, fell 2.1
percent to 130.47 Worldscale points on March 28.
It is
updated once a day at about 4 p.m. in London. Worldscale
points are a percentage of a nominal rate, or flat rate,
for more than 320,000 specific routes. Flat rates for
every voyage, quoted in US dollars a ton, are revised
annually by the Worldscale Association in
London
to reflect changing fuel costs, port tariffs and
exchange rates.
Each
flat rate assessment gives owners and oil companies a
starting point for negotiating hire rates without having
to calculate the value of each deal from scratch.
At
130.47 Worldscale points, owners of VLCCs can earn about
$96,339 a day on a 39-day roundtrip from Saudi Arabia to
South Korea, based on a formula by R.S. Platou, an
Oslo-based shipbroker, and Bloomberg marine fuel prices.
Frontline Ltd., the world's biggest VLCC operator, said
February 15 it needs $31,400 a day to break even on each
of its supertankers.
Bookings
for VLCCs sailing from the
Middle East to
Asia account for 47 percent of global demand for the carriers,
according to New York-based McQuilling Brokerage
Partners LLP. Shipments to the
US and
Caribbean, the second-biggest market, account for 14 percent of demand
for supertankers. (Bloomberg) |
