Nordic American Tankers Ltd (NAT)

[conix]

Oil shipping costs surge to 11-year highs

Oct. 10, 2019 3:28 PM ET|
About: Frontline Ltd. (FRO)|
By: Carl Surran, SA News Editor

The cost of shipping crude oil continues to climb and has now hit an 11-year high amid a capacity squeeze following the U.S. blacklisting of Cosco, one of the world's largest tanker owners and a major carrier for China's oil needs.

WSJ reports the average earnings for supertankers picking up cargoes from around the world hit $94,124/day, up from $18,284 on Sept. 25, when the U.S. blacklisted the Cosco fleet, and a Singapore broker said rates for some Very Large Crude Carrier cargoes on sailings from the U.S. Gulf Coast to the Far East topped $120K today.

"The market has gone bonkers," says George Lazaridis, head of research and valuations at Allied Shipbroking. "It's a bubble that could get bigger because of geopolitics before it bursts."

U.S. oil exports to Europe, which usually move in smaller tankers, reportedly hit a record 1.8M bbl/day for the week ending Oct. 7, double the 924K bbl/day in the previous week, but shipments to Asia, which are typically done on VLCCs, were nearly cut in half to 508K bbl/day.

The Chinese delegation to the U.S.-China trade talks are expected to raise the issue.

Potentially relevant tickers may include FRO, NAT, NNA, NM, NMM, TNK, TNP, TK, DSSI, ASC, SFL, DHT, EURN, INSW, GNK, SB, SBLK, STNG