HOUSTON/NEW YORK- Freight rates for US crude tankers bound for Asia hit an all-time high on Wednesday as US sanctions on a Chinese transport giant cut vessel availability, traders and shipbrokers said.
South Korea’s top refiner SK Energy chartered a supertanker, Maxim, to ship US crude to South Korea in November for $10 million, the highest price for a US Gulf-to-Asia shipment ever, two sources familiar with the matter said. SK could not be reached for comment.
The United States last week imposed sanctions on two units of China’s COSCO for alleged involvement in ferrying crude out of Iran. That action prompted US Gulf Coast exporters to hold back chartering COSCO-linked vessels, traders and shipbrokers said.
One of the units – COSCO Shipping Tanker (Dalian) – owns and manages at least 36 tankers for crude and refined products, including 18 supertankers or very large crude carriers (VLCCs), according to shipping sources and Refinitiv data.
Earlier this week, suggested rates for VLCCs, which can carry around 2 million barrels, from the US Gulf Coast to China vaulted to $9.8 million, up from $6.2 million in early September, according to ship broker McQuilling Services.
Friday’s highest quote was at $9.5 million for charterer Atlantic Trading & Marketing, a unit of Total SA, to book a VLCC from the US Gulf Coast to China, shipbrokers said. The deal did not go through, the brokers said, and Atlantic Trading declined to comment.
Occidental Petroleum Corp last week replaced a COSCO-operated supertanker, Coswish Lake, following the US sanctions, by chartering smaller vessels from Texas to destinations in Asia, shipbrokers said.
The Coswish Lake had anchored off Corpus Christi, Texas, since Sept. 23 and departed on Sunday without loading crude, according to Refinitiv Eikon data.
Occidental did not respond to requests for comment.
SK Energy also replaced a COSCO-operated supertanker, Cosmerry Lake, with two Suezmax-class tankers, which can carry about 800,000 to more than 1 million barrels, the Stena Supreme and Sonangol Portoamboi, shipbrokers said.
The surge in freight costs has narrowed the window to profitably export US crude to Asia and left some US crude exporters reluctant to book vessels at the higher rates. That could limit November loadings and exports unless more vessels become available in coming weeks, traders said. – Reuters