Persian tanker rates may fall

The cost of shipping crude oil from Persian gulf region to Asia, the world's busiest market for supertankers, may fall for a 12th consecutive day amid a glut of vessels.

Ship supply is very healthy from a charterer's point of view and lousy from an owner's point of view, Charlie Fowle, a director at London-based shipbrokers Galbraith's, said today. Cargo demand wasn't sufficient to reverse the trend, he added.

The London-based Baltic Exchange's benchmark tanker-rental rate, used to settle contracts between shipowners and oil refiners, fell 0.8 per cent to 54.44 Worldscale points yesterday.

Exxon Mobil Corp, the biggest oil company, hired Maersk Neptune, a 2007-built very large crude carrier (VLCC), owned by AP Moeller-Maersk, at a rate of 52.5 worldscale points to ship a consignment to Asia.

The rate paid by Exxon implies the Baltic Exchange's benchmark, already down 40 per cent since May 11, has further to fall. The exchange also takes ageing, one-hulled tankers that cost less to hire than double-hulled ships, into account when making its price assessment. Rental rates for one-hulled tankers will probably fall below 50 worldscale points, Fowle said.

Worldscale points are a percentage of a nominal rate, or flat rate, for more than 320,000 specific routes. Flat rates, quoted in the US dollars a tonne, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates. At 54.40 worldscale points, VLCC owners can earn about $21,996 a day on a 38-day round trip from Saudi Arabia to South Korea, based on a formula by RS Platou, an Oslo-based shipbroker, and Bloomberg bunker prices.

Bookings of supertankers sailing from the West Asia to Asia account for 47 per cent of global demand for the carriers, according to New York-based McQuilling Brokerage Partners LLP. The US and Caribbean cargoes account for 14 per cent.