THE very large crude carrier market is on course towards a new daily chartering record.
Egypt’s national oil company has provisionally agreed to charter a VLCC in a deal that would be worth the equivalent of $356,798 per day.
The Egyptian General Petroleum Corporation will hire the 2019-built and scrubber-fitted Hunter Laga for a Middle East Gulf to Red Sea voyage for 265 points on the Worldscale, according to VLCC pool Tankers International.
That translates to $308,226 in actual time charter equivalent and $356,798 for the round voyage TCE, the measurement used by TI to compare charter contracts between different vessels. The deal is subject to approval.
The provisional contract with EGPC eclipses recent similar deals. Unipec has chartered the 2009-built Caesar for almost $185,000 daily, while Day Harvest is set to take in the 2006-built DHT Falcon for $174,414, in terms of round voyage TCEs.
Aside from being a considerably younger ship, an explanation for the inflated payment for Hunter Laga could be that EGPC requires the vessel immediately.
The ship, which is operated by Trafigura and owned by Ship Finance International, is set to start its charter on April 30, whereas the other two vessels are scheduled to load in late May.
Hunter Laga left Singapore on April 16 and is currently off the Maldives, headed towards the Middle East Gulf, according to Lloyd’s List Intelligence.
Earlier this year, Saudi Arabia’s national shipping firm Bahri set the record for highest VLCC spot charter rate with a $352,000 daily payment for the 2012-built Sea Splendor.
After about six weeks of a very profitable market, spot charter rates are expected to drop this year as global oil demand shrinks because of the economic shutdown caused by the coronavirus and oil producers cut back on their supply. Still, overrunning oil supply and limited land storage is anticipated to favour the use of tankers as floating storage.
Nonetheless, despite this apparent confluence of negative factors for the spot market, daily charter rates for VLCCs are hovering around what could be described as remarkably high levels; Middle East to Asia routes average between $220,000 and $230,000 per day.
Tanker tonnage remains tight and oil supply cuts have not kicked in yet, making VLCCs, which typically move around 2m barrels of oil, still popular.
