FRO - Tanker rate surge unstoppable as VLCCs hit $120,000


Tanker bulls are showing no sign of stopping as vessel supply across the globe is tightening on seasonal demand and the removal of tonnage linked to Cosco Shipping Energy Transportation (CSET), the world’s largest crude tanker owner by capacity.

Based on Poten & Partners’ assessments, spot VLCC earnings on the Middle East Gulf-East Asia route have reached $120,000 per day, up from the day-ago level of $103,000 per day.

Data from Tankers International shows Awilco’s 299,999-dwt Eco Future (built 2016) was provisionally booked by Hyundai Oilbank to lift crude from the Middle East between 27 and 29 October for a shipment to South Korea at Worldscale 127.5. An email seeking comment from the Norwegian owner has not been responded.

Similar deals were done at WS 90 a week earlier.

Among other main trading routes, the lumpsum VLCC rates for US Gulf-China trade were assessed at $13.7m as of Tuesday afternoon, up by $494,444 from Monday.

Charterers have still refrained from booking vessels owned by CSET, whose subsidiary Cosco Shipping Tanker (Dalian) Co was put on Wahsington’s Specially Designated Nationals list on 25 September for allegedly violating Iran-relation sanctions.

“While it is difficult to determine the reach of the sanctions as Cosco fleet details are generally hidden and the sanctions also affect Cosco's indirect ownership interests…it is estimated that the sanctions target 25-50 VLCCs,” Deutsche Bank said in a note.

“With these black-listed vessels removed from the global supply picture, Chinese charterers and oil traders have been left scrambling to secure tonnage.”

“During times of uncertainty, charterers generally go long coverage and are more than willing to pay up to secure vessels.”

On the Baltic Exchange, average suezmax earnings were assessed at $98,308 per day as of Tuesday afternoon, up by $21,434 from the day-ago level.

“This is definitely the strongest suezmax market since the great suezmax rate spikes of 2008 and to a lesser extent the rate spike in 2014,” said Simpson Spence Young’s global suezmax head Robert Boles, citing tight supply is driving up freight rates.

Average aframax earnings were $48,712 per day, compared with $46,780 per day on Monday.

“Tankers earnings are ripping and climbing higher across the board as days go by,” Clarksons Platou Securities said.
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UPDATED 14 MINUTES AGO Saudi Aramco CEO says output stood at 9.9 million in October 1 MIN READ
https://www.reuters.com/article/us-saudi-aramco-ipo/saudi-aramco-ceo-says-output-stood-at-9-9-million-in-october-idUSKBN1WO0UJ?il=0

LONDON (Reuters) - Attacks on Saudi oil facilities have had no impact on Saudi Aramco’s position ahead of a planned partial stock market listing, its Chief Executive Amin Nasser told an Oil & Money conference on Wednesday.

Production for October stood at 9.9 million barrels per day (bpd), he said. Aramco is on track to regain its maximum oil production capacity of 12 million bpd by the end of November, he added.

He added the attacks resulted in no reduction in revenue for the company because it continued to supply its customers as planned.

Reporting by Shadia Nasralla, editing by Louise Heavens

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