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THE cost
of shipping Middle East crude to Asia, which climbed for
the first time in 11 days Thursday, may rise as the
number of shipments in April exceeds expectations and
refineries start looking for vessels to load next month.
Oil
companies have booked about 110 very large crude
carriers, or VLCCs, to load at Middle East ports this
month, said Charlie Fowle, a director at London-based
shipbroker Galbraith’s Ltd.
That’s
10-percent higher than last month and is “better than
expected,” he said.
“April
is turning into a big month and it’s clearing out” the
supply of ships fitted with double hulls that oil
companies prefer to hire, he said. Refineries probably
need to find ships for “a few more cargoes” to load this
month.
S-Oil
Corp.,
South Korea’s
third-largest refiner, hired the tanker Olympic Legend
for 85 Worldscale points, according to Athens-based
Optima Shipbrokers.
That’s
3.4 percent above the London-based Baltic Exchange’s
benchmark assessment of 82.19 points for a voyage to
Asia.
Olympic
Legend is fitted with a double hull to cut the risk of
an oil spill. The exchange’s assessment also takes into
account some ships that are fitted with single hulls and
are normally cheaper to hire.
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.
Crude
carriers
AT 82.19
Worldscale points, owners of VLCCs can earn about
$41,884 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.
Bloomberg
The
price of
Singapore fuel
oil climbed 2 percent to a record $527.50 a metric ton
as stockpiles declined, according to data compiled by
Bloomberg. Owners can conserve fuel by sailing slower, a
move that reduces ship supply.
Frontline Ltd., the world’s biggest VLCC operator, said
Feb. 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
U.S.
and Caribbean, the second-biggest market, account for 14
percent of demand for supertankers. (Bloomberg) |
