Persian Gulf Tanker Rates - Frontline, Ltd.

By Grant Smith
March 2 (Bloomberg)

http://www.bloomberg.com/apps/news?pid=20602099&sid=aXvljKXZBpKU&refer=energy

The cost of shipping 2 million-barrel consignments of crude to Asia from the Middle East may end a week of gains on expectations that supplies of ships will build as refiners start maintenance programs.

More than two-thirds of the expected cargoes from the Persian Gulf this month have been assigned ships, according to a report today by Paris-based shipbrokers Barry Rogliano Salles. It's another two weeks before new supplies will need to find vessels, the report said.

``In April refineries will close for maintenance so oil companies re-let'' vessels they don't need, Nikolaos Varvaropoulos of Athens-based Optima Shipbrokers said in an electronic message.

Freight rates for supertankers on the benchmark route to Japan were assessed at 69.3 Worldscale points yesterday by London's Baltic Exchange, up 13 percent from Feb 23. Two tankers were hired to Taiwan at WS 65, Barry Rogliano said in its report.

Worldscale points are a percentage of a nominal rate, or flat rate, for a specific route. Flat rates, quoted in U.S. dollars a ton, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.

At 65 Worldscale points, owners of modern, double-hulled Very Large Crude Carriers, or VLCCs, can earn about $40,022 a day on a 38-day round trip from Saudi Arabia to South Korea, based on a formula by R.S. Platou, an Oslo-based shipbroker, and Bloomberg bunker prices.

Frontline Ltd., the world's biggest operator of supertankers, said Feb. 27 that it needs $30,200 a day to break even on each of its VLCCs.

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