Persian Gulf Oil-Tanker Glut Seen Staying at Highest Since 2009
A glut of oil tankers competing to haul 2 million-barrel cargoes of crude from ports in the Persian Gulf is set to stay at the highest level since 2009 amid weaker demand for the ships, a Bloomberg News survey showed.
There are 20 percent more very large crude carriers, or VLCCs, seeking charters over the next 30 days than probable cargoes from the world’s largest loading region, according to the median in a Bloomberg survey of seven shipbrokers and owners today. That’s two percentage points fewer than last week and the largest surplus for this time of year since 2009.
Daily earnings for VLCCs globally slumped 66 percent from the start of the year to $10,031, according to Clarkson Plc (CKN), the world’s largest shipbroker. That’s less than half the $24,200 needed by Frontline Ltd. (FRO), the tanker operator led by billionaire John Fredriksen, for the vessels to break even. Charter costs to haul Saudi Arabian oil to Japan yesterday reached the lowest level since Feb. 14 in terms of industry-standard Worldscale points, according to the London-based Baltic Exchange.
“Slow activity results in slipping VLCC rates,” Oslo- based investment bank RS Platou Markets AS said in an e-mailed report today. “Brokers reported very few fixtures and longer tonnage lists.”
The surplus of VLCCs seeking charters in the gulf averaged 21 percent during the first quarter, also the highest since 2009, according to Bloomberg surveys.
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