Oil Shipping Costs Soar to Highest Levels in 11 Years
The cost of moving oil around the world has hit an 11-year high as producers scramble to find new supertankers following a U.S. blacklisting of a major Chinese operator that has sidelined dozens of ships.
“The market has gone bonkers by shock events like the Cosco tankers being blacklisted,” said George Lazaridis, head of research and valuations at Athens, Greece-based Allied Shipbroking. “It’s a bubble that could get bigger because of geopolitics before it bursts.”
Shipping executives say the U.S. action late last month over allegations that the vessels were tied to illicit shipments of Iranian crude has hit more than 40 tankers operated by a subsidiary of Cosco Shipping Energy Transportation, one of the world’s largest tanker owners and a major carrier for China’s oil needs.
Washington’s move pushed Asian and European importers searching for crude carriers in a tight market to secure oil cargoes as winter approaches.
But with Iran and Venezuela oil exports also under U.S. sanctions and Saudi Arabian oil production still trying to recover from a missile attack in September, oil traders have been turning to the U.S. for crude shipments.
The longer distance to move oil cargoes from the U.S. to Europe and Asia compared with moving them from the Middle East, has pushed daily charter rates for the big ships called very large crude carriers to their highest level since July 2008, according to Baltic Exchange data.
https://www.wsj.com/articles/oil-shipping-costs-soar-to-highest-levels-in-11-years-11570731475?mod=lead_feature_below_a_pos1
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