The rates for chartering supertankers have surged to a nearly three-year high this month as more crude is moving out of the Middle East and the U.S. to Asia, Reuters reports, citing sources in the shipping industry and data from LSEG.
As OPEC+ continues to raise production, shipments out of the world’s key exporting region, the Middle East, are on the rise. Additionally, Saudi Arabia has slashed the prices of its crude loading for Asia next month, further incentivizing crude flows to the top oil-importing region.
The tanker fleet is now split between tankers and tanker owners complying with the sanctions on Iran and Russia and the price caps on Russian crude, and those that do not and enter the shadow fleet. This further squeezes supply for tankers to move crude around the world.
As a result of all these factors, the spot rate for a Very Large Crude Carrier (VLCC) on the Middle East to China route jumped to at least $6.6 million, the highest level since November 2022, based on data compiled by LSEG and calculated by Reuters’ industry sources.
The rate per day for a VLCC – which can carry up to 2 million barrels of crude – is now about $87,000 to ship crude from Saudi Arabia to China, per Bloomberg estimates.
The earnings for supertanker owners are at their highest since 2023, the estimates showed.
Oil supply increases from the Americas and strong demand for long-distance shipments everywhere are supporting tanker rates, Lars Barstad, CEO at Norway’s tanker giant Frontline, told Bloomberg earlier this month.
“The main drivers behind the surge in September has been the open arbitrage for U.S. Gulf to East Asia flows and the subsequent tightness created by vessels committing to these very long-haul voyages,” Sentosa Shipbrokers told Reuters.
The supertanker spot rates are nearing the $100,000-per day threshold and analysts expect the momentum will be sustained through the end of the year amid rising exports from the Middle East, Lloyd’s List senior maritime reporter, Greg Miller, said in an analysis earlier this week.
By Tsvetana Paraskova for Oilprice.com
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