The cost of shipping Middle East oil to Asia may fall this week on slower demand for tankers in April. Freight rates for supertankers on the benchmark route to Singapore, little changed yesterday, have declined about 7 per cent this month on reduced bookings for April. Transport costs typically drop at this time of the year as some oil refineries close for routine maintenance, curbing demand for shipments. "Charterers are drip- feeding cargoes into the market" to get lower tanker rates, Per Mansson, a shipbroker at Nor Ocean Stockholm AB, said in a phone interview.
"I don't think we will see higher numbers being paid this week."
Singapore Petroleum Co booked a so-called very large crude carrier, or VLCC, called Yiomaral to load a cargo on April 11 at 120-122.5 Worldscale points, shipbrokers including Paris-based Barry Rogliano Salles said in notes to clients yesterday.
The rate was assessed at 120 Worldscale points on March 20, according to the Baltic Exchange in London. Worldscale points are a percentage of a nominal rate, or flat rate, for more than 320,000 specific routes.
Flat rates, quoted in US dollars a metric ton, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.
There were no bookings on the benchmark routes to the US VLCC rates to the US Gulf Coast were at 93 Worldscale points on March 20, according to the Baltic Exchange.
VLCCs are booked about a month in advance and charterers have about 24 hours to cancel contracts.
About 51 cargoes have been matched with tankers for April, according to Barry Rogliano Salles.
Ninety-four bookings were done for March and 103 for February, the broker said in the note.
At 120 Worldscale points, owners of double-hulled VLCCs can earn about US$80,900 a day on a 39-day round trip from Saudi Arabia to South Korea, based on a formula by RS Platou, an Oslo-based shipbroker. Frontline Ltd, the world's biggest VLCC operator, said Feb 15 it needs US$31,400 a day to break even on each of its supertankers.
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