Rental income from supertankers shipping Middle East crude oil to Asia more than doubled after demand strengthened and owners rejected unprofitable cargoes. Returns from very large crude carriers, or VLCCs, on the Saudi Arabia-to-Japan route climbed 114 percent to $14,986 a day, according to data from the London-based Baltic Exchange today. It was the largest one-day advance since Sept. 18. Today's jump “is a reaction to some heavy fixing in the last couple of days,” Per Mansson, managing director of shipbroker Nor Ocean Stockholm AB, said. There is a “thinning” in the supply of ships that can load around Aug. 20, he said. Frontline Ltd., the world's largest VLCC operator, said Aug. 4 it would anchor vessels and refuse shipments until profits from hauling oil improve. Maersk Tankers, a unit of A.P. Moeller-Maersk A/S, said two days later it was considering the same strategy. In non-oil commodity-shipping markets, rents for iron ore carrying ships advanced 20 percent today as demand for the steelmaking ingredient accelerated. “The VLCC market may have bottomed out,” Oslo-based Fearnley Consultants A/S said. “Charterers are willing to pay up” for shipments from the Persian Gulf to Asia. The International Energy Agency raised its estimate for worldwide oil consumption in 2010 and 2011 on “slightly higher” global economic growth forecasts by the International Monetary Fund in 2010. Charter rates for VLCCs on the Saudi Arabia-to-Japan voyage climbed 15 percent to 55.09 Worldscale points, according to Baltic Exchange pricing. “End-month cargoes being fixed, a thinner tonnage list, and firmer sentiment among owners” are behind today's increase in freight rates, Simon Chattrabhuti, head of tanker research at ICAP Shipping International Ltd., said. Worldscale points are a percentage of a nominal rate, or flat rate, for more than 320,000 specific routes. Flat rates for every voyage, quoted in US dollars a ton, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates. Each flat rate assessment gives owners and oil companies a starting point for negotiating hire rates without having to calculate the value of each deal from scratch. The Baltic Dirty Tanker Index, a wider measure of crude oil transportation costs, climbed 1.1 percent to 797 points, according to the exchange.
