| Reuters

UPDATE 2-Oil producers, refiners face surging global freight rates after U.S. sanctions

HOUSTON/NEW YORK/LONDON (Reuters) - Rates to charter oil tankers from the Arab Gulf, United Kingdom and the U.S. Gulf Coast to Asia surged to fresh highs on Friday as global oil traders grappled with a tanker shortage in the aftermath of U.S. sanctions on units of Chinese giant COSCO.

FILE PHOTO: A view of Hin Leong's Pu Tuo San VLCC supertanker in the waters off Jurong Island in Singapore, July 11, 2019. REUTERS/Edgar Su

Occidental Petroleum Corp (OXY.N) tentatively chartered a supertanker to ship U.S. crude from the U.S. Gulf Coast to Asia for a record $15.8 million this week, three sources said on Friday.

Royal Dutch Shell (RDSa.L) chartered the Suezmax vessel Amoureux this week for $9.2 million to ship crude from Teesport, U.K. to Dalian, China in early November, according to a shipping source and Refinitiv Eikon data.

Shell and Occidental declined to comment.

Freight rates for supertankers from the Louisiana Offshore Oil Port in the U.S. Gulf Coast to Singapore TD-LPP-SIN climbed to a record $9.28 a barrel this week, while rates to charter supertankers from Rotterdam to Singapore TD-RDM-SIN climbed to a 10-year high equal to $5.12 a barrel, according to Refinitiv Eikon data.

“Would make you choke on your Cheerios,” one shipbroker said, referring to the rising freight cost.

The United States in late September imposed sanctions on two units of China’s COSCO, which operates more than 50 supertankers, alleging the units violated U.S. sanctions on Iran. Freight rates for supertankers across the globe to ship oil, particularly to Asia, have surged.

Occidental provisionally chartered the Very Large Crude Carrier (VLCC) Hong Kong Spirit for $15.8 million for departure to Asia next month, sources said. That does not mean the voyage will actually be completed.

Bids for chartering VLCCs from the U.S. Gulf Coast to Asia were assessed on Friday as high as $20 million, shipbrokers said, though no charters had been booked at that price, sources said.

“The recent surge in tanker earnings is unprecedented,” ship broker Poten & Partners said in a note on Friday. “As rates reach into the stratosphere, it seems that the market will take a breather sooner or later. Many of the tankers that have recently been fixed or put on subjects don’t know their loading dates yet.”

In the Arab Gulf, Indian Oil Corp Ltd (IOC.NS) was offered rates in a range of $8.2 million to $16 million to ship Iraqi Basra crude to Chennai, India, according to a source with direct knowledge of the matter.

Rates from Basra to Visakhapatnam, India, for VLCCs reached $2.24 per barrel this week, highest in at least a year, Eikon data showed. Indian Oil did not immediately respond to a request for comment.

Reporting by Collin Eaton in Houston, Devika Krishna Kumar in New York and Julia Payne in London; Editing by Cynthia Osterman

Comments

ProVesting-profile-image
ProVesting @ProVesting - an hour ago
$OXY: US Crude Exports Could Plummet, Disrupting Occidental …: https://t.co/2HL5dZG3QY
RBoslego-profile-image
Robert Boslego @RBoslego - an hour ago
$OXY - U.S. Crude Exports Could Plummet, Disrupting Occidental Petroleum's Permian Export Business Plan. https://t.co/7BBe3NHITG
SeekingAlpha-profile-image
Seeking Alpha @SeekingAlpha - an hour ago
$OXY - U.S. Crude Exports Could Plummet, Disrupting Occidental Petroleum's Permian Export Business Plan. Read more:… https://t.co/QMPorUAXxV
PennyStocksMomo-profile-image
Penny Stocks with MOMO @PennyStocksMomo - an hour ago
RT @stockbeep: Oct 14 - Losers with unusually high vol today $JAG $PE $ASRT $DOYU $REI $OXY $PAGP $SIG $CNK $HIW (+8 more results) Sort…
AlertTrade-profile-image
Trade Alerts, Trade Ideas and Crypto 📈 @AlertTrade - an hour ago
RT @stockbeep: Oct 14 - Losers with unusually high vol today $JAG $PE $ASRT $DOYU $REI $OXY $PAGP $SIG $CNK $HIW (+8 more results) Sort…
CryptoTraderPro-profile-image
Crypto Trader Pro @CryptoTraderPro - an hour ago
RT @stockbeep: Oct 14 - Losers with unusually high vol today $JAG $PE $ASRT $DOYU $REI $OXY $PAGP $SIG $CNK $HIW (+8 more results) Sort…
stockbeep-profile-image
Stockbeep scanner @stockbeep - an hour ago
Oct 14 - Losers with unusually high vol today $JAG $PE $ASRT $DOYU $REI $OXY $PAGP $SIG $CNK $HIW (+8 more resul… https://t.co/1qLHIJ6u3j
MarcoCostaATFX-profile-image
Trading MarcoDaCosta @MarcoCostaATFX - 2 hours ago
RT @theflynews: Ulta Beauty #director purchased 243,849 shares of company stock, while Exelixis director sold 30,000 #shares. Catch up in "…
coinhack_coin-profile-image
CoinHack(コインハック) @coinhack_coin - 2 hours ago
2019年10月15日07時00分時点で、前日比価格が最も上昇(1900.0%)した通貨はOxycoin(オキシコイン)です。 $OXY https://t.co/7MRw0sH3dj
SwingTradeBot-profile-image
SwingTradeBot @SwingTradeBot - 2 hours ago
Scan results - New 52 Week Closing Low today: $IAA $ARLP $CGC $HEP $PAGP $ENBL $PAA $MTDR $OXY $EOG $TPB $TXRH… https://t.co/YhJaViJVmY
CentralChartsIT-profile-image
CentralCharts IT @CentralChartsIT - 3 hours ago
$OXY #OCCIDENTALPETROLEUM - Giornaliero: Dato che tutti gli elementi sono chiaramente ribassisti, i trader potrebbe… https://t.co/xQH3syDKyG
stockbeep-profile-image
Stockbeep scanner @stockbeep - 3 hours ago
Oct 14 - Stocks with new all time/52 week lows $OXY $QEP $CDEV $PAA $MTDR $DOYU $BE $SM $IAA $FRAC (+13 more res… https://t.co/DNLtomJ6Vr
mrland_news-profile-image
Benzinga Charlie (Charles Gross) @mrland_news - 4 hours ago
Block Trade: OXY 2.4M @ $40.439 $OXY https://t.co/eWywaIjpA0 @benzinga
coinhack_coin-profile-image
CoinHack(コインハック) @coinhack_coin - 4 hours ago
2019年10月15日05時00分時点で、前日比価格が最も上昇(1900.0%)した通貨はOxycoin(オキシコイン)です。 $OXY https://t.co/7MRw0sH3dj
TackleTrading-profile-image
Tackle Trading @TackleTrading - 4 hours ago
$SPX #stocks $AAPL and $NKE both hit new 52 week highs Monday while $DVN $EOG $NKTR and $OXY all hit new 52 week lows #trading