Wednesday, June 17, 2009
European Tanker Rentals Jump on Surge in Pumping of Azeri Crude
Wednesday, 17 June 2009
The cost of shipping oil in southern Europe rose the most since January on a jump in the amount of Azeri crude being pumped from a pipeline through Turkey. The price of hauling 650,000-barrel consignments across the Mediterranean Sea to southern European refineries yesterday rose 25 percent to 110.68 Worldscale points, its biggest one-day advance since Jan. 15 , according to the London-based Baltic Exchange. Owners' daily earnings from such shipments jumped 81 percent to $23,144 a day, according to the bourse.
"There are increased cargoes from Ceyhan," Dimitris Tsahalis, chartering manager for Thenamaris Ships Management Inc., an Athens-based owner of aframax vessels, said by phone today. At least 40 of the vessels were hired in the Black and Mediterranean seas last week, compared with between 25 and 30 normally, he said.
BP Plc, Europe's second-biggest oil company, and partners in a group pumping Azeri crude via a pipeline to Turkey's Mediterranean port of Ceyhan will ship 9.7 percent more fuel in July than June, according to a copy of the loading program obtained June 8 by Bloomberg News. They will load 877,419 barrels a day onto tankers, compared with 800,000 in June.
The supply of ships has been further diminished because traders are seeking carriers to export Russian fuel before a potential increase in taxes on cargoes, Tsahalis said. The nation's Finance Ministry said yesterday it may increase the levy on crude oil as much as 39 percent starting July 1. Prices on other fuels also climbed.
Longer Journeys
"This creates a rush for exporters to avoid an increase of taxation," Tsahalis said. In particular, traders are seeking vessels for shipments of Russian fuel oil to the U.S. and Asia, increasing average voyage lengths, he said.
Demand for aframaxes is also "strong" in the North and Baltic seas, lowering the chance owners will seek to compete for Mediterranean cargoes, he said.
Rental rates in the North Sea yesterday advanced 11 percent to 91.14 Worldscale points. In the Baltic Sea, they climbed 26 percent to 95.75 points.
Increased shipments from Ceyhan created a "very active" Mediterranean market, allowing owners to become "more bullish," Riverlake Shipping SA, Switzerland's largest shipbroker, said today in an e-mailed report.
Source: Alaric Nightingale, Bloomberg
