seagull Aug 11 '10, 15:13
Arabian Gulf tanker income drops for a ninth day
Rental income from shipping Middle East crude oil to Asia dropped for a ninth day, prompting speculation that more owners may reject cargoes until rates reverse their collapse Returns for very large crude carriers, or VLCCs, on the industry’s benchmark Saudi Arabia to Japan route declined 0.8 percent to $6,185 a day, according to prices from the London based Baltic Exchange. Charter rates fell 0.1 percent to 47.14 industry standard Worldscale points.
Rental income has slid to almost half of the $11,601 that London based Drewry Shipping Consultants estimates VLCCs must earn to pay crew, insurance, repairs and other running costs.
Frontline, the world’s biggest operator of the ships, said Aug 4 it would reject cargoes until rates improve. AP Moeller-Maersk AS said Aug 6 it would consider doing so.
In an email sent on Monday, Per Mansson, managing director of shipbroker Nor Ocean Stockholm, said: “Some of the rich Greek owners will just say no to cargoes as well. That will have an impact if volume is strong.”
Rental income from the voyage between Saudi Arabia and Japan is at the lowest level since Sept 18, 2009, according to exchange data. The route is the world’s busiest for VLCCs.
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, advanced 0.6 percent to 784 points, according to the exchange.
Saudi Arabia
