The cost of shipping oil across the Mediterranean Sea surged to the highest in almost six years as traders accelerated bookings to load Libyan cargoes at a time when tankers are being delayed reaching the region.
Aframax ships hauling 80,000 metric ton cargoes to southern European refineries from North African exporters are earning $137,687 a day, according to data today from Poten & Partners, a New York-based shipbroker. The figure is the most since March 2008, its data show.
Nationwide protests shut Libyan oil fields and export terminals in July last year, curbing shipments from Europe’s third-largest crude supplier. Some lost output is now returning and traders booked tankers to load 610,000 tons of Libyan oil in the week ended Jan. 26, the most since Sept. 1, according to charter lists compiled by Bloomberg. Fog is delaying ships at Turkey’s shipping straits, meaning fewer in the Mediterranean, according to Hartland Shipping Services, a shipbroker.
“Med-based Aframaxes have benefited from more cargo availability, including an unexpected return of Libyan crude export volumes,” Nigel Prentis, the London-based head of consultancy at Hartland, said in an e-mail yesterday. Weather delays are also boosting owners’ earnings, he said.
Rates measured in industry standard Worldscale terms have jumped to 349.50 points in the Mediterranean, according to the Baltic Exchange, a London-based publisher of rates on more than 50 trade routes. Earnings of about $162,000 a day are the highest since at least 2012, its data show.
European countries imported $36.5 billion of Libyan crude in 2012, according to data from ITC TradeMap, a venture between the World Trade Organization and United Nations. Russia was the largest supplier at $133 billion.
Aframax rates are being supported by higher prices in other tanker markets, Claire Rangel, consultancy and research director at shipbroker Simpson Spence & Young Ltd., said by phone. Supply of the vessels is also diminishing, she said.
Earnings for very large crude carriers taking 2 million barrel cargoes of Saudi Arabian oil to Japan, a benchmark route, jumped 15 percent to $56,031 per day yesterday, according to data from the Baltic Exchange. Thats the highest since June 2010.
“Once you had the VLCC market go up, that’s started to feed down through to some of the smaller sectors, probably moreso for Suezmaxes,” Rangel said. “It’s almost been like the perfect storm of factors that have all happened at once.”