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Shipping Costs Are Soaring as LNG Vessels Drop Out of Service

  • CNOOC seeking 2 LNG cargo replacements as sanctions hit ships
  • Spot market already tight on bad weather, floating cargoes

Photographer: Tomohiro Ohsumi/Bloomberg

Updated on

The cost of chartering a liquefied natural gas vessel on the short-term market has jumped the most since at least 2013.

The day rate for a standard tanker East of the Suez Canal jumped 57% in the week to Oct. 9, as issues related to U.S. sanctions on units of China’s COSCO Shipping Corp. start to hit just as the heating season begins to boost demand. That comes on top of other factors limiting the number of ships available, including Typhoon Hagibis in Japan, the biggest buyer of the fuel, and the stockpiling of fuel on tankers.