Charter rates for VLCCs on Saudi Arabia to Japan route gained 0.3 percent
The cost of delivering Middle East crude to Asia, the world’s busiest route for supertankers, was little changed as demand slowed for loadings in January.
Charter rates for very large crude carriers, or VLCCs, on the industry’s benchmark Saudi Arabia to Japan route gained 0.3 percent to 69.54 Worldscale points, according to the Baltic Exchange in London. Returns from the route gained 1.4 percent to $26,277 a day.
“With most of early January cargoes covered, we would expect the market to ease off over the holidays and into the New Year,” Erik Nikolai Stavseth and Martin Sommerseth Jaer, analysts at Arctic Securities ASA in Oslo, said in an e-mailed note on Saturday. Still the supply of ships is “more finely balanced than in a long time” compared with likely cargoes, they said.
Rental income on the Middle East-to-Asia route may average the lowest for a December since at least 2001, according to data compiled by Bloomberg. Returns have averaged $17,527 a day this month. The previous low for a December was $19,341, set in 2001, according to the data going back to that year.
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 US 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.
The Baltic Dirty Tanker Index, a wider measure of crude oil transportation costs, fell 0.3 percent to 1,043 points, according to the Baltic Exchange. That was the gauge’s third straight decline.For all the latest transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.