Oil shipping rates are soaring following a series of sanctions on a Chinese tran...
- Oil shipping rates are soaring following a series of sanctions on a Chinese transportation giant and limitations placed on movement of Venezuelan crude oil tankers.
FILE PHOTO: A view of a VLCC supertanker in the waters off Jurong Island in Singapore, July 11, 2019. REUTERS/Edgar Su/File PhotoThe cost of chartering a supertanker to send crude oil from one country to another is rising sharply. A South Korean importer paid more than $12 million in shipping costs for one crude shipment from the U.S. Gulf Coast. This was followed by Friday’s tentative charter of another crude vessel by Occidental Petroleum Corp for $13.25 million to ship in November.
About one-third of those tankers have shut off their ship-tracking transponders since the U.S. sanctions, according to Refinitiv Eikon data.Last week, Exxon Mobil Corp banned the use of vessels linked to oil flows from Venezuela in the last year, affecting some 250 ships. Exxon is the largest U.S. oil company and a major shipper, and its move caused rates to rise further, market sources have said.
The move comes several months after the United States imposed sanctions on Venezuela in an attempt to cut off the nation’s oil revenue in a bid to oust President Nicolas Maduro, who is accused of human rights violations and rigging the 2018 presidential election. Maduro calls opposition leader Juan Guaido a U.S. puppet.
In addition, Unipec, the shipping arm of China’s Sinopec, has also said it will not use vessels that have been linked to flows out of Venezuela for the same time period.A small amount. After those attacks last month, shippers worldwide scrambled to secure cargoes for big buyers in Asia, and many of them turned to the United States. That boosted rates, though the current surge is tied more to sanctions on COSCO and Exxon’s moves.
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