By Florence Tan and Ben Blanchard / Reuters, SINGAPORE and TAIPEI
State-owned oil refiner CPC Corp, Taiwan (台灣中油) and trader Glencore PLC have chartered tankers to load Middle Eastern crude for Asia, while at least two Chinese vessels are heading to the Strait of Hormuz to exit the Gulf, a day after a ceasefire in the Iran war was announced.
The two-week ceasefire is conditional on allowing ships to pass through the strait, a choke point for about 20 percent of global oil and liquefied natural gas shipments. The six-week conflict brought traffic at the strait close to a standstill, pushing global energy prices sharply higher.
Asian refiners rely on the Middle East for more than half of their supply of crude and naphtha, feedstocks for fuel and petrochemical production. Countries have released strategic crude stockpiles, increased subsidies and banned fuel exports to address the loss of supply from the war.
Photo: Peter Lo, Taipei Times
CPC had booked one tanker in the Gulf to bring about 2 million barrels of oil, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) told reporters in Taipei today.
“If passage is possible within the next two weeks or so, it can come over,” he said.
“With these 2 million barrels, given that we use an average of about 150,000 barrels per day, this can provide an additional half month or more of usage. So this will help ease, and further ease, the situation,” he said.
Refiners, energy majors and trading firms yesterday rushed to book tankers to load Middle Eastern crude for Asia, hours after the ceasefire was announced.
Glencore chartered the Asian Lion, a very large crude carrier (VLCC) capable of holding 2 million barrels of oil, at W580 on the Worldscale industry measure used to calculate freight rates, according to a shipping source and LSEG data.
The ship’s demurrage fee is US$580,000 per day, the source said.
Demurrage is a charge paid to the ship owner in the event that a vessel exceeds the amount of time agreed for loading and unloading a cargo.
The tanker is heading to the Middle East, LSEG data showed.
Glencore could not be immediately reached for a comment on the vessel fixture.
Spot VLCC shipping rates on the route, more commonly known as TD3C, have more than doubled from W230 on Feb. 27, before the war started, LSEG data showed.
Tanker rates are expected to remain elevated due to a surge in demand and war risk premiums for ships entering the Gulf, while there were fewer vessels available, as many of them are ballasting to the Americas to load cargoes, a Singapore-based trader said.
Tankers inside the Gulf are preparing to exit.
The China-flagged VLCCs He Rong Hai and Cospearl Lake are ballasting toward the strait, shipping data on LSEG showed.
Late yesterday and early today, several tankers called at the United Arab Emirates’ Zirku Island Port to top up with Upper Zakum crude, the data showed.
Still, shippers remained concerned, with some yesterday saying they needed more clarity on the terms of the US-Iran ceasefire before resuming transit through the Strait of Hormuz, as Iran said the waterway remained closed to vessels sailing without a permit.
Iran’s Revolutionary Guards navy posted a map showing alternative shipping routes in the Strait of Hormuz to help transiting ships avoid naval mines, the semi-official Iranian Students’ News Agency said early today.