(Feb 3): Tankers moving crude from the Middle East to China have charged the highest fees in two months this week, after nervousness over Iran tensions combined with tight vessel supply to drive up prices.
The daily earnings of a vessel on the benchmark TD3C route gained 5.1% on Monday to nearly US$129,000 per day, the highest since late November, according to data published by the Baltic Exchange.
The jump comes after a 61.6% surge on Friday, as fears of a possible US-led military action against the Islamic Republic intensified. On the day, reports of Iran considering live-firing exercises spooked markets, while Bloomberg News reported that Greece, home to the world’s largest tanker fleet, had warned ships to stay away from Iran’s coast when moving through the Strait of Hormuz.
Recent purchases by owners such as Sinokor Merchant Marine, with its acquisition of nearly 30 mid-aged vessels, tightened the supply of tankers available for near-term charters, said Wanying Zhang, freight analyst with the ship-tracking platform Vortexa. “With fewer vessels available for immediate hire, the remaining independent shipowners have gained significant pricing power,” she said.
Last week’s speculations about escalating tensions between Iran and the US prompted a rush from charterers to secure vessels ahead of any potential supply disruption, shipbrokers said. Owners responded by rising their rates. As a result, the global Worldscale index, which captures the cost of transporting oil through a complex analysis of freight routes, jumped from 105 to 140 on Friday due to disruptions affecting the TD3C route, brokers said.
See also: Refiner Eneos to expand oil-trading portfolio outside of Japan — Bloomberg
Concerns over Middle East developments may fade and take the steam off the rally, brokers added. On Tuesday, US President Donald Trump suggested that he was open to talks with Iran in the coming days, a sign that the US and the Islamic Republic may be stepping back from the brink of conflict. The possibility of easing tensions prompted a slide in prices of crude futures this week.
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