VLCC shortage in West Africa helps firm freight rates

Athens: The short list of VLCC tonnage available in West Africa (WAF) has helped firm freight rates heading East with 260,000-tonne crude cargoes, data compiled by Splash shows.

Dynacom Tankers’ VLCC Georgios (300,000 dwt, built 2009) was fixed on subjects yesterday to Indian Oil Corporation (IOC) at a rate of $5.45m for the WAF to East Coast India run (laycan June 6-7). VLCC fixtures show India to be relying more heavily on West African crude, as Splash reported previously.

Athenian Freedom (319,000 dwt, built 2013), owned by Greece’s Athenian Sea Carriers, was also fixed on subjects yesterday to make the trip from WAF to Taiwan at a worldscale rate of 67.5 (laycan June 14-15). The timecharter equivalent (TCE) daily rate is $80,263 for 56.35 days (including 6.58 idle days) or $4.52m for the trip East.

These rates show progress on fixtures made last week for the same runs.

On May 7, IOC fixed Ship Finance International’s Front Serenade (299,200, built 2002) to go from WAF to East Coast India at a rate of $5.2m (laycan June 5-6).

Aeolos Management’s Chryssi (298,900 dwt, built 2000) was fixed to Unipec on May 7 at a rate of WS 58.5 heading from WAF to China. The timecharter equivalent (TCE) daily rate was $52,089 for 66.95 days or $3.49m for the voyage.

Record-high Chinese imports of crude during April have tied up VLCC tonnage, accounting for the shortage of open tankers in the WAF region. China’s crude imports averaged 7.4m bpd last month, an 8.6% increase on a year previously.

Falling oil prices have encouraged Chinese traders to stockpile crude, but imports are predicted to tail off as China runs out of storage capacity.

Brazilian energy producer Petrobras has this week fixed three VLCCs on subjects to collectively take around 780,000 tonnes of crude oil from Brazil to China, which has also helped take tonnage out of the market.

The WS rates for the fixtures show a reduction compared to VLCCs fixed in April, when Chinese imports of crude were surging. Petrobras fixed three VLCCs in April to make the Brazil-China run at an average WS rate of 60.83, compared to an average of WS 54.17 this week.

On Monday, Petrobras fixed Minerva Marine’s Zourva (318,500 dwt, built 2014) on subs for rate of WS 53.5 (laycan June 5-10). The timecharter equivalent (TCE) daily rate for the leg is $50,936 for 79.87 days, including 5.77 idle days, or $4.07m.

Skopelos (319,400 dwt, built 2002), owned by Greece’s Aeolos Management, was fixed to make the trip for a rate of WS 54 or a TCE rate of $93,918 per day or $4.55m for 48.42 days, including 3.64 idle days (laycan June 9-10).

COSCO’s Cosjade Lake (298,300 dwt, built 2009) was fixed at a rate of WS 55 or a TCE of $57,520 daily for 76.36 days or $4.39m total, including 1.43 idle days (laycan May 30 – June 5).


Holly Birkett

Holly is Splash's Online Editor and correspondent for the UK and Mediterranean. She has been a maritime journalist since 2010, and has written for and edited several trade publications. She is currently studying for membership of the Institute of Chartered Shipbrokers. In 2013, Holly won the Seahorse Club's Social Media Journalist of the Year award. She is currently based in London.
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