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LONDON—The cost of shipping Middle East crude to Asia,
the world’s busiest route for supertankers, may drop for
a fifth day as vessel demand slows and owners lower
their rates to win cargoes.
Oil
companies hired 20 very large crude carriers, or VLCCs,
to load at the region’s ports during the past week,
according to data from Barry Rogliano Salles. That’s
about a fifth less than the weekly average for last
year, according to the Paris-based shipbroker.
“The
market is currently showing a correction,” Nikos
Varvaropoulos, a broker at Optima Shipbrokers in
Athens,
said in an e-mailed note late Tuesday. Hire rates will
“continue to be firm” through June, he said.
Iran
is storing between 20 million and 40 million barrels of
crude on VLCCs near Kharg Island, cutting supply of
ships in the single-voyage, or spot, market. The
Organization of Petroleum Exporting Countries is
shipping near-record volumes of oil. Against that,
record oil could trigger a global recession and cut
demand for crude cargoes, according to the International
Energy Agency, adviser to 27 oil-consuming nations.
CPC
Corp., Taiwan’s state oil refiner, hired the tanker
Hebei Mountain
for 192.5 Worldscale points, according to Barry
Rogliano’s report. That’s 4.9 percent below the
London-based Baltic Exchange’s benchmark assessment of
202.34 points for a cargo to Asia.
Hebei Mountain
is fitted with a double hull to cut the risk of an oil
spill. The exchange’s assessment is for ships up to 15
years of age, of which about 11 percent aren’t fitted
with full double hulls, according to Lloyd’s Register-Fairplay
data on Bloomberg. Double-hull tankers are normally more
expensive to hire than those with single hulls.
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
202.34 Worldscale points, owners of double-hulled VLCCs
can earn about $164,697 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) |
