Middle East Tanker Glut Little Changed as Owners Pay to Ship

A surplus of supertankers competing to ship Middle East oil around the world was little changed as rental income on some voyages fell so low that owners were prepared to contribute to fuel costs to leave the region.

There are 28 percent more vessels for hire over the next 30 days than there are cargoes, according to the median estimate of four shipbrokers, two owners, one derivatives broker and one trader surveyed by Bloomberg News yesterday. A week ago, there were 30 percent more ships than cargoes. Owners are contributing $6,023 a day toward fuel and port costs to ship cargoes of Middle East crude oil to the U.S., according to prices from the London-based Baltic Exchange. For Japanese shipments, the industry benchmark voyages, cargoes are earning $4,859 a day, still not enough to pay for the crew, repairs and other daily running costs. For owners who want to move their ships west to seek more profitable employment, getting some of the fuel paid for may be a better option than sailing empty, which works out at almost $30,000 a day.

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