Returns from shipping Middle East crude to Japan, the world’s busiest route for supertankers, climbed for a fifth day as owners resisted shipping unprofitable cargoes and the supply of ships was diminished for some cargoes.
Rental income from very large crude carriers, or VLCCs, delivering Saudi Arabian crude oil to Japan climbed 8.3 percent to $21,809 a day, according to the London based Baltic Exchange.
Charter rates as measured by the industry’s Worldscale system climbed 2.4 percent to 60.30 points.
The market has risen after owners rejected unprofitable cargoes and because of constrained vessel supply around Aug 20, Per Mansson, managing director of Nor Ocean Stockholm, said by email today, adding he expects rate gains to slow.
VLCCs need to earn $11,601 a day to pay crew, insurance and other running costs, according to London based Drewry Shipping Consultants.
Frontline, the largest operator of the ships, needs about $31,100 once finance costs are included.
The Worldscale Association produces yearly dollars per metric ton flat rate estimates for 320,000 tanker voyages.
That means today’s rate for the journey between Saudi Arabia and Japan is 60.3 percent of the association’s yearly assessment for the route, for example.
The Baltic Dirty Tanker Index, an overall measure of crude oil transportation costs, gained 0.5 percent to 820 points today, according to data from the Baltic Exchange.
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