Supertanker Owners May Start Refusing Cargoes Unless Rates Return to a Profitable Level
September 22nd, 2009Via: Hellenic Shipping News:
Supertanker owners may start refusing cargoes within the next three months unless rates return to a profitable level, said Frontline Ltd., the biggest operator of the ships which carry almost half the world’s oil. Ship owners are contributing $942 a day toward fuel costs to ship Middle East crude, according to the London-based Baltic Exchange. Rates have been below operating costs since July. Should the losses persist, some owners may choose to idle their ships, according to Jens Martin Jensen, Singapore-based chief executive officer of Frontline’s management unit.
“If you see another quarter, then I think owners have to do something,” Jensen said by phone today. “We are subsidizing oil companies.”
The Organization of Petroleum Exporting Countries has cut output by 4 percent this year to 28.4 million barrels a day, according to Bloomberg estimates. Over the same period, the fleet of in-service supertankers has advanced 5.8 percent to 528 ships, according to Lloyd’s Register-Fairplay data on Bloomberg.
Research Credit: Dang
From the BBC:
“From the top of Singapore’s Equinox bar you can see the city skyline and ship after ship after ship.
“Singapore claims to be the busiest port in the world, with some 130,000 ship arrivals each year.
“But these days, the problem is many of those vessels are not putting back out to sea.
“The usual stay for a cargo carrier is just ten days. That is enough time to offload one set of cargo and take on another load, re-fuel and re-stock supplies.
“But, of the 220 container ships arriving in Singapore this year, – excluding the tugs, yachts and bunkering vessels which are permanent port residents – more than half have stayed longer than that.
“Another 44 cargo ships have been in port for more than six months.”