• Latest
  • Trending
  • All
Oil shipping rates soar as U.S. supertanker sanctions rattle crude trade

Oil shipping rates soar as U.S. supertanker sanctions rattle crude trade

November 12, 2019
These inventory trackers will notify you when hard-to-find items are back in stock

These inventory trackers will notify you when hard-to-find items are back in stock

April 15, 2020
Antonov An-225 Mriya: world’s largest cargo plane, history, details

Antonov An-225 Mriya: world’s largest cargo plane, history, details

April 15, 2020
Copperstate Farms Launches International Cannabis Brand DNA Genetics in Arizona Market

Copperstate Farms Launches International Cannabis Brand DNA Genetics in Arizona Market

April 14, 2020
Mzee Moi’s Ksh10B Gift to Gideon

Mzee Moi’s Ksh10B Gift to Gideon

April 14, 2020
Covid Knights: Corporate social purpose in the time of COVID-19

Covid Knights: Corporate social purpose in the time of COVID-19

April 14, 2020
How Tesla And BMW Are Leading A Supply Chain Renaissance With Blockchain

How Tesla And BMW Are Leading A Supply Chain Renaissance With Blockchain

April 14, 2020
Last Mile Delivery Market Worth Observing Growth | UPS, FedEx, SF Express

Last Mile Delivery Market Worth Observing Growth | UPS, FedEx, SF Express

April 14, 2020
LATAM Cargo strengthens European cargo links

LATAM Cargo strengthens European cargo links

April 14, 2020
Ford making reusable hospital gowns from airbag materials as efforts against coronavirus expand

Ford making reusable hospital gowns from airbag materials as efforts against coronavirus expand

April 14, 2020
Don’t Sweat NBC’s Decision to Cut Back on Television Ad Inventory

Don’t Sweat NBC’s Decision to Cut Back on Television Ad Inventory

April 14, 2020
Software firms sharpen focus on AI, big data as IT spending drops

Software firms sharpen focus on AI, big data as IT spending drops

April 14, 2020
Navigating turbulent times in your supply chain (TL:DR version)

Navigating turbulent times in your supply chain (TL:DR version)

April 14, 2020
  • Supply Chain
  • Logistics
  • Warehousing
  • Procurement
  • Shipping
  • More
    • Strategic Sourcing
    • Spend Analysis
    • Inventory
    • Contact Us
No Result
View All Result
United States International Supply Chain Commission
United States International Supply Chain Commission
Home Shipping

Oil shipping rates soar as U.S. supertanker sanctions rattle crude trade

by usiscc
November 12, 2019
in Shipping
0
Oil shipping rates soar as U.S. supertanker sanctions rattle crude trade
491
SHARES
1.4k
VIEWS
Share on FacebookShare on Twitter

SINGAPORE/LONDON (Reuters) – Key oil freight rates from the Middle East to Asia rocketed as much as 28% on Friday in a global oil shipping market spooked by United States sanctions on units of Chinese giant COSCO for alleged involvement in ferrying crude out of Iran.

FILE PHOTO: A China Ocean Shipping Company (COSCO) container ship is seen at San Antonio port in Chile August 6, 2019. REUTERS/Rodrigo Garrido/File Photo

In what the State Department called “one of the largest sanctions actions the U.S. has taken” since curbs were re-imposed on Iran in November last year, two units of COSCO were named alongside other companies in claims of involvement in sanctions-busting shipments of Iranian oil.[

The surprise move, affecting one of the world’s largest energy shippers operating more than 50 supertankers, comes as U.S. President Donald Trump seeks to exert maximum pressure on Iran to drop nuclear programs.

As some Asian oil buyers rushed to secure vessels, rates for chartering supertankers, or very large crude carriers (VLCCs), to load crude oil from the Middle East to North Asia in October surged nearly 19% overnight to about 75-76 points on Worldscale, an industry tool used to calculate freight charges, shipping and industry sources said.

That means an increase of about $600,000 per ship, a Singapore-based crude oil trader said.

(GRAPHIC: Global oil freight rates rocket as U.S. sanctions tanker units of Chinese giant COSCO, here)

“The current strength in rates has been triggered by geopolitics,” shipbroker E.A. Gibson said on Friday. “This week’s U.S. sanctions on two COSCO subsidiaries added more fuel to the fire.”

Supertanker rates on the benchmark Middle East Gulf to China route soared to $51,480 a day and were at their highest in nearly 11 months, Baltic Exchange data showed later on Friday.

Shipping sources added that tanker derivatives rates for the fourth quarter of 2019 – which give an indication of forward rate expectations – also rose on Friday to 88 Worldscale points, from 85 on Thursday.

The rates for loading Middle East crude to west coast India in the second week of October jumped 28% to 80-92.5 points after Reliance Industries Ltd (RELI.NS) booked two supertankers overnight, industry sources said.

But there was also uncertainty over how widely the sanctions on the COSCO units – COSCO Shipping Tanker (Dalian) Co, Ltd and its subsidiary COSCO Shipping Tanker (Dalian) Seaman & Ship Management Co, Ltd – would be implemented.

COSCO Shipping Tanker (Dalian) owns and manages at least 36 tankers for crude and refined products, including 18 VLCCs, according to shipping sources and Refinitiv data.

At least three ships linked to COSCO Shipping Tanker (Dalian) scheduled to load oil from the United States and Brazil were canceled, oil and shipping sources said.

“There’s confusion in the market for those who has fixed the COSCO’s vessels. Everyone wants to avoid exposure to U.S. sanctions,” a Singapore-based trader said.

Provisional bookings for VLCCs Cosmerry Lake and Yuan Qiu Hu to load U.S. oil in the second half of October were scrapped.

Cosmerry Lake, owned by Cosmerry Lake Maritime Inc and managed by COSCO Shipping Tanker (Dalian), is floating off the U.S. Gulf. Yuan Qiu Hu, owned and managed by COSCO Shipping Tanker (Dalian), is on its way to the U.S. Gulf.

A third COSCO-linked supertanker was chartered to load in Brazil, but it has been replaced by another vessel, a source with knowledge of the matter said.

Contacted by Reuters, an official at COSCO said the impact of the sanctions was being examined.

“(The) company is assessing the situation and impact internally as soon as possible, but so far we don’t have anything to update you,” said Zhang Zheng, an investor relations official with COSCO Shipping Energy Transportation (1138.HK), parent of COSCO Shipping Tanker (Dalian) Co, Ltd.

Trading in shares of COSCO Shipping Energy Transportation was halted on Thursday after the news on the sanctions.

REFINERS

Industry sources said some buyers were holding off while they check with legal teams to better understand the impact of the sanctions.

“The market is fearful of sanctions so refiners are taking some preventive measures. We’ll have to see how widely implemented the sanctions will be,” said KY Lin, spokesman for Taiwanese refiner Formosa Petrochemical (6505.TW), a major crude oil buyer in Asia.

Friday’s jolt comes after turmoil in mid-September with drone and missile strikes on key Saudi Arabian oil production facilities, which roiled global markets and pushed tanker rates higher. The COSCO vessels are equal to about 7.5% of the world’s fleet of supertankers, according to Refinitiv data.

“Charterers are in trouble,” a North Asian shipbroker said, declining to be named citing company policy. “It was terrible news for every one of us with the Saudi drone attack, and now the market has to deal with U.S. sanctions on COSCO.”

“Good news for owners, good time for them to earn money,” the broker said.

(Graphic: MAP – Global oil shippers reel after U.S. sanctions world’s largest oil tanker fleet, here)

On Thursday, Unipec, the trading arm of Asia’s largest refiner Sinopec (600028.SS) and India’s largest refiner Indian Oil Corp (IOC.NS), canceled bookings of some COSCO ships and scrambled to find alternative ships to move their crude on.[

“Rates have definitely been pushed higher by these sanctions,” said an executive at a top shipbroker in Singapore, adding that ships carrying Middle East and U.S. crude to Asia were subject to the biggest impact. The broker declined to be identified, citing company policy.

Freight rates for shipping naphtha and other clean oil products were also affected with those from the Middle East to Japan jumping 13% to their highest levels in nearly two weeks, according to industry sources and Refinitiv data.

FILE PHOTO: Containers are seen on a China Ocean Shipping Company (COSCO) ship at the San Antonio port in Chile August 6, 2019. REUTERS/Rodrigo Garrido/File Photo

UK-FLAGGED TANKER FREED

While diplomatic tensions between the United States and Iran remain high, a British-flagged tanker that had been detained by Iran in the Strait of Hormuz on Friday left Bandar Abbas port heading for international waters after being held since July.

“Global trade relies on the safe passage of goods. Without this, consumers and businesses could suffer with increased costs, particularly at the petrol pump,” said Bob Sanguinetti, chief executive of the UK Chamber of Shipping trade association.

Reporting by Florence Tan, Chen Aizhu and Roslan Khasawneh and Jonathan Saul; writing by Gavin Maguire; Editing by Kenneth Maxwell, Jason Neely and Alex Richardson

Our Standards:The Thomson Reuters Trust Principles.
Share196Tweet123Share49
usiscc

usiscc

  • Trending
  • Comments
  • Latest
Antonov An-225 Mriya: world’s largest cargo plane, history, details

Antonov An-225 Mriya: world’s largest cargo plane, history, details

April 15, 2020
These inventory trackers will notify you when hard-to-find items are back in stock

These inventory trackers will notify you when hard-to-find items are back in stock

April 15, 2020
‘Significant opportunity’ in Asia as supply chain integrates, consolidates

‘Significant opportunity’ in Asia as supply chain integrates, consolidates

January 3, 2020
These inventory trackers will notify you when hard-to-find items are back in stock

These inventory trackers will notify you when hard-to-find items are back in stock

0
Global Industry Analysis, Size, Share, Growth, Trends, and Forecasts 2016–2024 – ZMR News Reports

Global Industry Analysis, Size, Share, Growth, Trends, and Forecasts 2016–2024 – ZMR News Reports

0
PHOTOS: Ottawa firefighters respond to warehouse fire

PHOTOS: Ottawa firefighters respond to warehouse fire

0
These inventory trackers will notify you when hard-to-find items are back in stock

These inventory trackers will notify you when hard-to-find items are back in stock

April 15, 2020
Antonov An-225 Mriya: world’s largest cargo plane, history, details

Antonov An-225 Mriya: world’s largest cargo plane, history, details

April 15, 2020
Copperstate Farms Launches International Cannabis Brand DNA Genetics in Arizona Market

Copperstate Farms Launches International Cannabis Brand DNA Genetics in Arizona Market

April 14, 2020
  • Privacy Policy
  • Terms of Use
  • Disclaimer
  • DMCA
  • Contact Us

Copyright © 2021 United States International Supply Chain Commission (usiscc.org)

No Result
View All Result
  • Supply Chain
  • Logistics
  • Warehousing
  • Procurement
  • Shipping
  • More
    • Strategic Sourcing
    • Spend Analysis
    • Inventory
    • Contact Us

Copyright © 2021 United States International Supply Chain Commission (usiscc.org)

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Cookie settingsACCEPT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled

Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.

Non-necessary

Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.

SAVE & ACCEPT