Charter rates for the largest oil tankers hauling Middle East crude to the U.S. climbed after stronger demand drew vessels to Asia, according to shipbroker Braemar Seascope Ltd.
Earnings to carry cargoes to China topped those for crude bound for the U.S., London-based Braemar Seascope said today in an e-mailed report. Rates “jumped up” because shipowners were unwilling to accept lower returns, it said.
Hire costs for very large crude carriers on the Saudi Arabia-to-U.S. voyage surged 29 percent this week to 23.39 industry-standard Worldscale points, according to figures from the London-based Baltic Exchange today. That was the biggest increase this year. Each of the tankers can hold 2 million barrels of oil.
“It started with cargoes to the east,” Kevin Sy, a Singapore-based freight-derivatives broker at Marex Spectron Group, said by e-mail. “Even if owners refuse a U.S.-bound cargo, they know quite a few eastbound cargoes are working, so in the end the U.S. charterers have to pay up as well. I won’t be surprised if rates ease off again after the last few May cargoes are covered.”
The route is based on a journey to the Louisiana Offshore Oil Port in the Gulf of Mexico from Ras Tanura in Saudi Arabia, the world’s biggest oil-export site, according to the exchange.
The supply of VLCCs available to load crude in the Persian Gulf over the next four weeks shrank to 60, the lowest for a four-week forward period since Nov. 15, according to data from Marex Spectron. The tally of ships was 76 at the start of the month. Rates will be “prevalent into next week,” according to Braemar Seascope.
Charter rates for VLCCs on the benchmark Saudi Arabia-to-Japan voyage added 0.9 percent to 39.94 industry-standard Worldscale points, the exchange’s figures showed, equating to daily returns of $11,091. Its earnings assessments don’t account for owners’ efforts to improve returns by securing cargoes for return-leg voyages or reducing speed to burn less fuel.
The price of fuel, or bunkers, the industry’s main expense, fell 0.6 percent to $608.75 a metric ton, figures compiled by Bloomberg from 25 ports showed.
The Baltic Dirty Tanker Index, a broader measure of oil-shipping costs including smaller vessels, fell 0.5 percent to 617, according to the exchange.
The biggest change for crude-oil tankers was for Aframax vessels hauling 650,000 barrels to the French port of Lavera from Sidi Kerir in Egypt, which fell 3.6 percent to 68.64 Worldscale points, exchange data show. For ships carrying refined fuels, the largest move was for voyages to Japan from the Middle East, with rates sliding 3.1 percent to 84.59 points.