Foreign media reported that supertanker freight rates have fallen sharply from historical highs, but are still at extremely high levels. (Reuters)
[Financial Channel/Comprehensive Report] Global oil tanker freight rates have fallen sharply recently. Among them, the charter cost of very large crude carriers (VLCC) on the U.S. Gulf of Mexico to Asia route has plummeted 43.47% in one month, attracting market attention. In addition, the daily equivalent rental income of VLCC on the route from West Africa to China also fell 35% from the historical high in October, but it was still 361% higher than three months ago. "Lloyd's List" pointed out that after the U.S. midterm elections, crude oil tanker spot freight rates, forward freight agreements, oil prices and tanker stocks all fell sharply.
"Bloomberg" quoted data released by the Baltic Exchange in London on Monday as pointing out that the cost of chartering a supertanker capable of transporting 2 million barrels of crude oil to sail from the U.S. Gulf of Mexico to Asia has dropped to approximately US$45 million (approximately NT$1.47 billion) from US$79.6 million (approximately NT$2.61 billion) a month ago. Although freight rates remain at very high levels, continued declines could make long-distance crude oil trading attractive again.
In this regard, "Lloyd's List" analysis pointed out that after the U.S. midterm elections, the market behaved as if it expected the Democratic Party to gain control of Congress, which would bring an end to the Iran war and restore a safer navigation environment in the Strait of Hormuz. However, the situation may also develop in the opposite direction, including the conflict between the United States and Iran escalating again, which will increase the risk of ship traffic.
"Lloyd's List" pointed out that the future direction of the tanker market depends on the subsequent development of the situation, including three scenarios: conflict escalation, negotiation agreement, and continued deadlock, which may lead to different freight price trends.
It is worth noting that the decline in tanker freight rates is not limited to the US-Asia route. Hellenic Shipping News, a professional shipping media, reported on November 9 that the tanker market has generally weakened in the past week. Not only has the freight rate of ultra-large tankers dropped, but the freight rates of Suezmax tankers in routes such as West Africa and the U.S. Gulf of Mexico have also dropped significantly. Aframax tankers have simultaneously weakened in the Mediterranean and North Sea markets.
Shipbroker Affinity pointed out that VLCC freight rates continued to decline throughout the week, mainly due to limited chartering inquiries and the more competitively priced Suezmax tankers attracting some supply, suppressing shipowners' freight expectations. Among them, the decline in the Atlantic market was more obvious, and some cargo owners turned to lower-cost Suezmax tankers, further weakening the market demand for VLCC.
In the market east of the Suez Canal, although chartering activities have increased slightly and the short-term available ship supply is still tight, it is not enough to prevent freight rates from falling. On the other hand, in the Suezmax market due to weak chartering activities in the previous weeks and the increase in the number of ships available for charter, freight rates have been rapidly revised; in the Mediterranean Aframax market, due to the increase in ship supply, charterers have been able to continue to lower prices.
Overall, reports from Bloomberg and Hellenic Shipping News show that the recent correction in tanker freight rates has spread to different ship types and multiple major shipping markets. However, "Lloyd's List" also reminded that although tanker freight rates have fallen from historical highs, shipowners' current earnings are still at a very high level, and the subsequent development of the situation in Iran is still an important factor affecting future freight rates.
