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. The rate for a Very Large Crude Carrier (VLCC) from the Middle East to China, Japan, and Singapore is assessed at just above world scale 80 on Thursday, according to shipbroking firm Meiwa International, the highest level since April.
Worldscale (W) is an industry tool used to calculate freight charges.
The rise in freight rates comes ahead of higher crude demand in Asia in the 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 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, signaling 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.
Source: Hellenic Shipping News
