Persian Gulf Tanker Rates Snap Nine-Day Slump

Persian Gulf Tanker Rates Snap Nine-Day Slump on Ship Supplies
By Grant Smith
July 2 (Bloomberg)

The cost of transporting Middle East crude to Asia on supertankers snapped a nine-day slide as the number of spare vessels dwindled.

The number of vessels available for hire next month has shrunk about 8 percent since June 29 because of a series of bookings that day, according to a report e-mailed today by Paris- based shipbrokers Barry Rogliano Salles. There are 99 tankers free today, compared with 108 on June 29.

``It looks like it's bottomed out,'' shipbroker Halvor Ellefsen of Sealeague AS said in an e-mail from Oslo.

Freight rates for very large crude carriers, or VLCCs, on the benchmark route to Japan rose to 60.1 Worldscale points on June 29, the last assessment available from London's Baltic Exchange. Rates fell 21 percent last month as Asian refiners reduced imports while performing seasonal maintenance.

At 60.1 Worldscale points, owners of modern VLCCs can earn about $31,037 a day on a 38-day round trip from Saudi Arabia to South Korea, based on a formula by R.S. Platou, an Oslo-based shipbroker, and Bloomberg bunker prices.

Frontline Ltd., the world's biggest oil-tanker company by capacity, said on May 30 that it needs more than $29,500 a day to be profitable on each of its VLCCs.