Saudi Arabia’s decision to flood the oil markets with up to 12.3 million b/d of crude oil, followed by reports of Bahri’s rare move to charter up to 19 supertankers, has sent daily freight rates for Very Large Crude Carriers (VLCC) skyrocketing.
According to reports from Reuters, Saudi’s national shipping firm Bahri has provisionally chartered up to 19 very large crude carriers, six of them believed to be earmarked to ship crude to the United States.
The action came on the back of Saudi Aramco announcing steep discounts to its official selling price for April, igniting a price war among major global producers.
The discounts were announced after OPEC’s proposal to cut production of oil by 1.5 million barrels per day failed to secure support from Russia amid fears the production decrease would solely aid North American shale producers.
The latest fixtures data from Tankers International show at least nine fixtures arranged by Bahri Oil Transportation for modern tankers over the past two days averaging at USD 70K per day.
The fixtures further indicate that VLCCs are being hired for up to USD 299,900 per day as charterers scramble to secure floating storage for excess crude. Namely, the 2012-built Maran Antares, managed by Maran Tankers secured almost 300K per day from its charterer PTT from Thailand.
This is a major shift from the daily rates that averaged at USD 30,000 just a few days ago. The surge is reminiscent of VLCC rates jumping following OFAC’s sanctions on COSCO Dalian, removing a considerable portion of tankers from the market.
Hence, VLCC rates jumped to over 100,000 per day, before falling back again in February to around USD 25K on average once the company was whitelisted again.
World Maritime News Staff