VLCC Shortage Cuts In On Rotterdam and Singapore Fuel Oil Arbitrage

by Ship & Bunker News Team
Monday October 27, 2014

A shortage of available very large crude carriers (VLCC) in Western Europe has cut in on arbitrage opportunities to ship fuel to Singapore, reports Platts. 

"The Singapore arbitrage is definitely open now but players are struggling to find available VLCC to move fuel," said an unnamed source based in Rotterdam

Another source also said that they weren't able to find an available VLCC until late November. 

"There are hardly any ships available in the West at the moment," said an unnamed shipbroker.

"Several ships got taken to the Caribbean which has restricted tonnage in the UK Continent.

"There are only one or two ships that could do Rotterdam loads in the next month." 

Sources have predicted that the lack of free capacity will lead to higher freight rates, with rates pegged in the $4.6-5 million lump sum range.

The plunging price of oil has also made larger ports such as Singapore and Rotterdam even more attractive as the price advantage of refuelling at cheaper ports decreases.