Supertanker freight rates jump as Mideast crude exports to Asia rise

Meiwa

15/06/2023 06:21

By Florence Tan and Jeslyn Lerh
       SINGAPORE, June 15 (Reuters) - The costs of chartering
supertankers to move crude oil from the Middle East to Asia have
jumped to the highest since April as more cargoes are being
booked in June, according to industry sources and data on
Refinitiv Eikon.
    The rate for a Very Large Crude Carrier (VLCC) from the
Middle East to China, Japan and Singapore is assessed at just
above worldscale 80 on Thursday, according to shipbroking firm
Meiwa International, the highest levels since April.
    Worldscale (W) is an industry tool used to calculate freight
charges.
    The rise in freight rates come ahead of higher crude demand
in Asia in third quarter as refineries complete maintenance and
ramp up output to meet peak summer fuel demand.
    A flurry of bookings has tightened regional availability of
ships in the short term, the sources said, while a surge in
tanker rates from the West further buoyed sentiment in Asia.
    The market "is really heating up now", said a shipbroker who
declined to be identified due to company policy.
    "We are seeing more end-June cargoes than expected."
    He estimated that there are 156 tankers provisionally
chartered to load crude in the Middle East for Asia in June, up
from 137 in May.
    Similarly, the freight cost for a VLCC on the U.S. Gulf
Coast-China route jumped nearly $500,000 to $9.34 million on
June 14, according to Meiwa.
    "The freight market has significantly strengthened on-week,
with major routes to Asia quoted at much higher levels than the
previous week, signalling that there will be more arrivals to
China in August," said Emril Jamil, Refinitiv's senior analyst
for crude and fuel oil.
    U.S. crude arriving in Asia in June is estimated to hit an
all-time high of 9.96 million tonnes, up 27.9% from May, he
said.
    A source at a shipping firm expects rates to go higher in
the coming weeks.
    The global emergence of the so-called "dark fleet", to move
oil from sanctions-hit Russia, Iran and Venezuela, has also
drawn some ships away from the regular pool, the source added.
    

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 (Reporting by Florence Tan and Jeslyn Lerh; Editing by Kim
Coghill)
 ((Florence.Tan@thomsonreuters.com; Reuters Messaging:
florence.tan.thomsonreuters.com@reuters.net))