Oil Trading in U.S. Gulf Dries Up as Tanker Rates Skyrocket

U.S. sellers can also offer to local refineries or store
Port gears up for potential slowdown in crude export growth

Oil tankers are anchored near the Port of Long Beach, California, U.S., on Thursday, Dec. 31, 2009. A surplus of idled oil tankers, which would stretch 26 miles if lined up end to end, may signal a 25 percent slump in freight rates this year. The ships will unload 26 percent of the crude and oil products they are storing in six months, adding to vessel supply and pushing rates for supertankers down to an average of $30,000 a day, compared with $40,212 now.Photographer: Bloomberg/Bloomberg

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By Sheela Tobben

October 15, 2019 at 8:30 PM UTC

Updated on

October 16, 2019 at 11:00 AM UTC

This article is for subscribers only.

Soaring oil-tanker costs are drying up activity in the U.S. export market as sellers are slow to lower offers and buyers are skittish, according to market participants.

Some sellers have held back from offering cargoes, while others have yet to reduce their offers enough to accommodate the rising cost of shipping oil, according to 10 market participants. Buyers are holding out for deeper discounts after sanctions on units of China’s COSCO Shipping Corp. took away tankers from the global shipping pool, they said. As a result, hardly any deals have been booked over the past few days, compared to six or seven seen in a typical day.