Freight rates for supertankers from the Louisiana Offshore Oil Port to Singapore TD-LPP-SIN climbed to a record $9.28 a barrel last week, Reuters reports.
But LOOP wasn’t alone in seeing rising costs. Rates to charter oil tankers from the Arab Gulf, United Kingdom and the U.S. Gulf Coast to Asia surged to fresh highs as global oil traders grappled with a tanker shortage in the aftermath of U.S. sanctions on units of Chinese giant COSCO.
Occidental Petroleum Corp tentatively chartered a supertanker to ship U.S. crude from the U.S. Gulf Coast to Asia for a record $15.8 million this week, three sources told Reuters.
The U.S. in late September imposed sanctions on two units of China’s COSCO, which operates more than 50 supertankers, alleging the units violated U.S. sanctions on Iran. Consequently, freight rates for supertankers across the globe to ship oil, particularly to Asia, have surged.
Bids for chartering very large crude carriers from the U.S. Gulf Coast to Asia were assessed on Friday as high as $20 million, ship brokers told Reuters, though no charters had been booked at that price.
“The recent surge in tanker earnings is unprecedented,” ship broker Poten & Partners said in a note on Friday. “As rates reach into the stratosphere, it seems that the market will take a breather sooner or later. Many of the tankers that have recently been fixed or put on subjects don’t know their loading dates yet.”