Supertanker rates fall as demand eases, US considers sanction removal

by@Reuters

Summary

The cost of shipping oil on supertankers has declined this week from record highs, primarily due to reduced demand for tankers on the Gulf of Oman to China route, as indicated by Baltic Exchange data. The rate fell to about 776 on the Worldscale basis, down from 841 the previous week, following a series of attacks in the Middle East that softened overall demand for tanker services. Additionally, the Trump administration's consideration of easing sanctions on specific shadow fleet vessels is expected to further decrease freight rates by increasing the availability of ships for oil transport. Despite this drop, tankers remain in high demand due to the ongoing US-Israeli conflict with Iran, which has heightened the use of ship-to-ship transfers through the Strait of Hormuz, contributing to persistent elevated shipping costs.

Analysis

Kpler: Kpler is a Brussels-based provider of data intelligence and analytics platforms focused on global commodity flows and maritime shipping. The company aggregates real-time information from multiple sources to support trading and market analysis in energy and related sectors. Its analyst Matthew Wright directly addressed the recent softening in demand for supertanker routes in the news. Michael Ryan: Michael Ryan is the Freight Commodity Owner and analyst at Sparta Commodities with extensive experience in energy trading and freight. He commented on how potential US policy changes regarding sanctions could increase available tanker capacity and influence rates. His remarks contextualize the role of regulatory developments in the observed market shift. Matthew Wright: Matthew Wright serves as an analyst at Kpler covering tanker and shipping markets. He provided expert commentary explaining the drop in Gulf of Oman VLCC rates due to reduced demand following heightened Middle East activity. His insights appear in coverage of current freight rate movements. Market Dynamics: Demand for supertankers on the Oman to China route has softened amid higher freight costs and lower export volumes from the Middle East Gulf. Policy Development: The Trump administration is considering easing sanctions on certain shadow fleet vessels, which market participants expect would expand the pool of available ships for oil transport. Geopolitical Context: The US-Israeli conflict with Iran has led to increased ship-to-ship transfers through the Strait of Hormuz, sustaining elevated demand for tankers on key routes despite recent rate easing.

Categories

macro

Related sources

View Original Tweet