Business

Global freight rates surge on US sanctions as traders shun nearly 300 oil tankers

MEXICO CITY/SINGAPORE (REUTERS) – Nearly 300 oil tankers globally have been placed off limits as companies fear violating US sanctions against Iran and Venezuela, driving freight rates to new highs, industry sources said.

The move has taken roughly 3 per cent of the global oil tanker fleet out of the market, according to industry sources and data on Refinitiv Eikon, sending rates soaring to secure tankers to ship oil, particularly to Asia.

"Freight rates are going through the roof and people are getting very nervous with the cost of shipping," a crude oil trader in Asia said on Friday (Oct 11), declining to be identified as he was not authorised to talk to media.

Unipec, the trading arm of China's Sinopec, Swiss trader Trafigura AG, oil firm Equinor ASA, Exxon Mobil Corp are shunning 250 crude and oil products tankers which have carried Venezuelan oil in the past year.

Oil companies are also avoiding 43 oil tankers owned by Cosco Shipping Tanker (Dalian) after the United States last month imposed sanctions on two units of Chinese shipping giant Cosco for allegedly transporting Iranian crude.

Cosco Dalian also owns 3 per cent of the global very large crude carrier (VLCC) fleet and the absence of its ships was a key driver for supertanker freight rates which hit new highs daily over the past two weeks, traders and shipbrokers said.

"This is now a handicapped set of vessels which are difficult to trade," Anoop Singh, regional head of tanker research at ship broker Braemar ACM, said, referring to the Cosco Dalian tankers.

Disruptions from the recent attacks on Saudi oil facilities and the ban on ships that called on Venezuelan ports in the past year have exacerbated tightness in the tanker market, he added. Braemar estimates another 23 VLCCs are also out of service tRead More – Source

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