Oil Producers, Refiners Face Surging Global Freight Rates

Rates to charter oil tankers from the Persian Gulf, United Kingdom and the US Gulf Coast to Asia surged to fresh highs on Friday as global oil traders grappled with a tanker shortage in the aftermath of US sanctions on units of Chinese giant COSCO.
Occidental Petroleum Corp tentatively chartered a supertanker to ship US crude from the US Gulf Coast to Asia for a record $15.8 million this week, three sources said Friday, Reuters reported.
Royal Dutch Shell chartered the Suezmax vessel Amoureux this week for $9.2 million to ship crude from Teesport, UK to Dalian, China in early November.
Freight rates for supertankers from the Louisiana Offshore Oil Port in the US Gulf Coast to Singapore TD-LPP-SIN climbed to a record $9.28 a barrel this week, while rates to charter supertankers from Rotterdam to Singapore TD-RDM-SIN climbed to a 10-year high equal to $5.12 a barrel.
The United States in late September imposed sanctions on two units of China’s COSCO, which operates more than 50 supertankers, alleging the units violated US sanctions on Iran. Freight rates for supertankers across the globe to ship oil, particularly to Asia, have surged.
Occidental provisionally chartered the Very Large Crude Carrier Hong Kong Spirit for $15.8 million for departure to Asia next month, sources said. That does not mean the voyage will actually be completed.
Bids for chartering VLCCs from the US Gulf Coast to Asia were assessed on Friday as high as $20 million, shipbrokers said.
In the Persian Gulf, Indian Oil Corp Ltd was offered rates in a range of $8.2 million to $16 million to ship Iraqi Basra crude to Chennai, India.
Rates from Basra to Visakhapatnam, India, for VLCCs reached $2.24 per barrel this week, highest in at least a year.