VLCC rates set to soar on back of increased cargo from West Africa, Middle East

VLCC rates set to soar on back of increased cargo from West Africa, Middle East

Oct 3, 2016: Freight rates for very large crude carriers (VLCCs) are set to increase next week, riding high on a raft of cargo from West Africa and the Middle East. VLCC freight rates hit a multi-month high on September 29.

This would result in a rise of around $10,000 per day in earnings for a VLCC from the Middle East to Asia, freight rate data on the Reuters Eikon terminal showed. The momentum picked up after the number of supertanker cargo from West Africa climbed by around 25 percent since on Shell lifted force majeure on Bonny light crude exports from Nigeria on September 6, 2016. The number of cargo from West Africa is expected to rise next month with eight cargoof Qua Iboe crude oil from Nigeria, under force majeure since a pipeline issue in July, scheduled to be shipped, according to loading plans shown to Reuters. Exports of Qua Iboe crude could rise further in November with 285,000 barrels per day (bpd) provisionally forecast, according to an initial loading programme. VLCC rates from the Middle East to Japan climbed to around W38.25 on Thursday from about W32.50 last week, the highest since August 22. That was an increase in earnings from $13,567 to $19,961 a day. Rates for VLCCs from West Africa to China soared to W50 on Thursday against W43 on the same day last week. Charter rates for an 80,000-dwt Aframax tanker from Southeast Asia to East Coast Australia were almost unchanged at W66.75 on Thursday compared with around W67.50 last week.

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