Asia VLCC Rates Reach Five-And-A-Half Year High At $100,000 Per Day

Rising rates have been seen in the Asia and West Africa market. 

Very large crude carrier (VLCC) rates on voyages between the Persian Gulf and East Asia have reached a five-year high at $100,000 per day, Platts reports.

Stronger-than-expected demand from China, weather-related delays, cheaper bunkers, and more exports from Iraq have all reportedly contributed to the soaring rates, with some reports having noted that the rates have not hit above $100,000 per day since September 2008.

"Looks like there is going to be a long happy winter for owners with earnings as high as $96,000-$100,000," said an unnamed source in Singapore. 

China in particular was a surprise, with "a record number of fixtures this week from all areas," according to Charles R. Weber Co analyst George Los. 

Rising activity in the West Africa market also reportedly diverted some capacity away from East Asia, leading to a similar rise in rates in that market. 

West Africa-Far East rates have reportedly hit five-and-a-half-year highs as heavy demand and full storage tanks mean that ships have been taking longer to discharge cargo. 

 "There are ullage issues all over Asia and there are ships stuck in China, Yanbu, Singapore and India," said an unnamed source.

"There are delays of 30 days for discharging at some Chinese ports."

Iraq's loading program at Basrah was cited once again, with another unnamed shipowner saying that "there is a lot of cheap oil to be shipped."

"The Iraqis have been very busy, the October Basrah program is huge," the source said. 

It was not good news for all routes, however, as long-range tanker rates on the Mediterranean to Japan route have reportedly fallen to its lowest point in four-and-three-quarter years.

Last month, Ship & Bunker reported that cheaper bunkers had helped to prop up Asian VLCC prices despite tumbling rates.