Rates to ship two million-barrel cargoes of Middle East oil to Asia, the world’s busiest route for supertankers, dropped for a fourth session in London as demand waned.

Charter rates for hauling Saudi Arabian crude to Japan, the industry’s
benchmark route, fell 1.8 per cent to 49.45 Worldscale points,
according to the London-based Baltic Exchange. Owners’ income from the
voyage slid 3.5 per cent to US$26,123 a day.

Demand slowed ‘in anticipation’ of the US Thanksgiving Day holiday
yesterday and the Muslim religious festival of Hari Raya Haji,
Oslo-based Fearnley Consultants A/S said in a note on its website on
Wednesday. Oil companies are working ‘more slowly’ and owners
‘capitulated’ because of the lower demand, it said.

Middle East members of the Organization of Petroleum Exporting
Countries have cut combined output by 2.7 per cent this year to 19.6
million barrels a day, according to Bloomberg estimates. The number of
very large crude carriers, or VLCCs, in service has climbed 4.8 per
cent to 523 vessels over the same period, according to Lloyd’s Register
Fairplay data.

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.

Returns from leasing suezmax tankers that haul one million-barrel
cargoes, half as much as a VLCC, slipped 0.3 per cent to US$32,714 a
day. Aframaxes that transport 650,000 barrels lost 3.8 per cent to
US$17,604 a day.

Source: Bloomberg

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