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THE cost
of shipping Middle East crude to Asia, the world’s
busiest market for supertankers, may climb for a second
day as soaring fuel bills exacerbate owners’ losses,
prompting them to decline cargoes.
Marine
fuel oil, or bunkers, climbed to a record $513 a metric
ton at Fujairah , according to data from OceanConnect.
The
price means some operators are losing more than $13,000
a day for every day they lease out one of their ships.
“Owners
will not let the market go further down,” said Nikos
Varvaropoulos, a broker at Optima Shipbrokers in
Athens,
adding that some will refuse bookings rather than take
rates to cut their losses, he said.
Royal
Dutch Shell Plc., Europe’s biggest oil company, hired
the tanker Safwa at a rate of 60 Worldscale points,
according to a report from Paris-based shipbroker Barry
Rogliano Salles.
That’s
one percent above the London-based Baltic Exchange’s
benchmark rate of 59.35 points for voyages to Asia.
Safwa
probably cost more to hire than the benchmark because
it’s fitted with two steel hulls to reduce the risk of
an oil spill in the event of an accident.
The
exchange assessment also takes into account bookings of
older, single-hull vessels.
Shell
also negotiated an option to haul the cargo west.
Oil
companies usually have to pay more for extra discharge
possibilities because it increases uncertainty for the
owner as to when the vessel will next be available for
hire.
Flat
Rates
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 59.35
Worldscale points, owners of double-hulled very large
crude carriers, or VLCCs, can earn about $16,660 a day
on a 38-day roundtrip from Saudi Arabia to South Korea,
based on a formula by RS Platou, an Oslo-based
shipbroker, and Bloomberg marine fuel prices.
Based on
fuel prices from October 8, the same rate of 59.35
points would have earned owners $25,825, according to
the same formula.
Frontline Ltd., the world’s biggest VLCC operator, said
August 22 it needs $30,000 a day to break even on each
of its supertankers.
Different owners break-even levels on single-voyage
charters depend on their fuel-hedging strategies and how
much debt they assumed when they bought their fleets.
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) |
