VLCC rates leap in wake of Saudi attacks

VLCC rates leap in wake of Saudi attacks
Sam Chambers September 17th, 2019 https://splash247.com/vlcc-rates-leap-in-wake-of-saudi-attacks/

VLCC rates from the Arabian Gulf and West Africa to Asia leapt more than 10% yesterday and are continiuing to rise on Tuesday in the wake of Saturday’s attacks on Saudi oil installations that have knocked out nearly 6m barrels per day of oil from global supplies.

Most of this increase reflects the higher bunker prices, but there is also an element of risk management, analysts at Poten & Partners noted.

“Charterers are less willing to play the ‘wait-and-see’ game and owners resist ‘last done’ under these circumstances,” Poten pointed out.

A review of AIS data shows that loading activity resumed in the last 24 hours at Ras Tanura, Saudi Arabia’s main export terminal.

Brokers Affinity suggested in a note to clients that VLCCs will be hit by a sudden lack of cargo volumes out of the Arabian Gulf, as VLCC cargoes account for 89% of all Saudi Arabia’s crude exports. Affinity estimated that there will be a fall in demand of between 2 – 3 VLCCs each day.

Meanwhile, Braemar maintained clean and dirty tanker demand will likely be boosted over the short term, as refiners in the east start sourcing alternative crudes from the Atlantic Basin.