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Persian Gulf Tanker Rates May Climb as Iran Storage Cuts Supply |
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Saturday, 03 May 2008 |
 The cost of shipping Middle East crude to Asia, the world's busiest route for supertankers, may climb for a 17th day as Iran doubled the number of carriers it uses for storage, deepening a vessel shortage. OPEC's second-largest oil producer is storing at least 20 million barrels of crude on 10 double-hull very large crude carriers, or VLCCs, in the Persian Gulf, people familiar with
the situation said. That's cutting the supply of vessels that can ship fuel and boosting hire rates.
``There will be some steamy numbers,'' Per Mansson, a tanker broker at
Nor Ocean Stockholm AB, said in an e-mailed note today. ``Storage is
always good for the market.''
S-Oil Corp., South Korea's third-biggest refiner, hired the tanker
Delta Millennium for 177.5 Worldscale points, according to a report
from Paris-based shipbroker Barry Rogliano Salles Friday. That's 2
percent below the London-based Baltic Exchange's benchmark assessment
of 181.04 points for a voyage to Asia.
There are 28 double hull VLCCs for hire in the next 30 days compared with 56 a month ago, according to a Barry Rogliano.
Worldscale points are a percentage of a nominal rate, or flat rate, for
more than 320,000 specific routes. Flat rates for every voyage, quoted
in U.S. dollars a ton, are revised annually by the Worldscale
Association in London to reflect changing fuel costs, port tariffs and
exchange rates.
Each flat-rate assessment gives owners and oil companies a starting
point for negotiating hire rates without having to calculate the value
of each deal from scratch.
At 181.04 Worldscale points, owners of double-hulled VLCCs can earn
about $149,083 a day on a 39-day round trip from Saudi Arabia to South
Korea, based on a formula by R.S. Platou, an Oslo-based shipbroker, and
Bloomberg marine-fuel prices.
Frontline Ltd., the world's biggest VLCC operator, said Feb. 15 it
needs $31,400 a day to break even on each of its supertankers.
The Organization of Petroleum Exporting Countries is a 13- nation
producer group which includes Saudi Arabia, the world's largest oil
exporter.
Source: Bloomberg
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