Supertanker freight rates fell this week from record highs. Demand eased after a wave of attacks on vessels in the Middle East, and the US is considering easing sanctions on the so-called shadow fleet. Rates remain close to record levels.
The cost of shipping oil on the largest tankers fell this week from record highs as demand eased following a wave of attacks on vessels in the Middle East. The US is also considering easing sanctions on the so-called shadow fleet.
Freight rates for very large crude carriers (VLCCs) on the Gulf of Oman to China route fell to about 776 on the Worldscale basis, according to Baltic Exchange data. Last week the rate stood at 841, the highest since its launch earlier this year, after gains since the outbreak of the Iran war.
Kpler analyst Matthew Wright said demand on the route has softened since the fresh attacks, because higher Middle East Gulf freight rates and lower export volumes reduced it. Meanwhile, Sparta Commodities analyst Michael Ryan said Trump administration comments about potentially removing sanctions on some shadow-fleet tankers pushed freight rates lower. A removal would increase the number of ships that can carry oil, he added.
Despite the drop, rates remain close to record highs. The US-Israeli war on Iran has increased ship-to-ship transfers to move oil out of the Strait of Hormuz, which boosts tanker demand. Rates have also eased from record highs on other routes this week, such as West Africa to Asia.
If elevated shipping costs persist, they could add to inflationary pressures and raise costs for businesses and consumers.
Source: Investing.com
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