OIL: Asia Bookings Drive Surge in Oil Supertanker Rates

Oil supertanker rates to transport crude from the US Gulf to China have surged amid increased bookings by South Korean shipper Sinokor Merchant Marine Co. according to Bloomberg.

• The rise in bookings for long-haul voyages in the past week has rapidly tightened the availability of tankers but the motivation for the increase was unclear with some booked with no underlying cargo.
• The cost for VLCC from the US Gulf to Asia rose by more than $1 million a day on Jan 8. At least one US to China vessel was chartered for nearly $10 million, compared with about $7 to $8 million last week.
• Rates for other key routes have also risen with the benchmark Middle East to China route gaining the most since September.
• Red Sea attacks and vessel diversions have also added to some voyage lengths and reduce availability while volumes could be supported by strong US output and full year imports quotas in China.

Source: Bloomberg