Log in
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 

MarketScreener Homepage  >  Equities  >  Shanghai Stock Exchange  >  COSCO SHIPPING Energy Transportation Co., Ltd.    600026   CNE000001BD6


News SummaryMost relevantAll newsPress ReleasesOfficial PublicationsSector news

Oil shipping rates soar as U.S. supertanker sanctions rattle crude trade

share with twitter share with LinkedIn share with facebook
09/27/2019 | 12:37pm EDT
FILE PHOTO: Containers are seen on a China Ocean Shipping Company (COSCO) ship at the San Antonio port in Chile

SINGAPORE/LONDON (Reuters) - Key oil freight rates from the Middle East to Asia rocketed as much as 28% on Friday in a global oil shipping market spooked by United States sanctions on units of Chinese giant COSCO for alleged involvement in ferrying crude out of Iran.

In what the State Department called "one of the largest sanctions actions the U.S. has taken" since curbs were re-imposed on Iran in November last year, two units of COSCO were named alongside other companies in claims of involvement in sanctions-busting shipments of Iranian oil.[

The surprise move, affecting one of the world's largest energy shippers operating more than 50 supertankers, comes as U.S. President Donald Trump seeks to exert maximum pressure on Iran to drop nuclear programmes.

As some Asian oil buyers rushed to secure vessels, rates for chartering supertankers, or very large crude carriers (VLCCs), to load crude oil from the Middle East to North Asia in October surged nearly 19% overnight to about 75-76 points on Worldscale, an industry tool used to calculate freight charges, shipping and industry sources said.

That means an increase of about $600,000 per ship, a Singapore-based crude oil trader said.

GRAPHIC: Global oil freight rates rocket as U.S. sanctions tanker units of Chinese giant COSCO - https://fingfx.thomsonreuters.com/gfx/ce/7/6663/6645/MidEastAsiaCrudeFreightRates.png

"The current strength in rates has been triggered by geopolitics," shipbroker E.A. Gibson said on Friday. "This week’s U.S. sanctions on two COSCO subsidiaries added more fuel to the fire."

Supertanker rates on the benchmark Middle East Gulf to China route soared to $51,480 a day and were at their highest in nearly 11 months, Baltic Exchange data showed later on Friday.

Shipping sources added that tanker derivatives rates for the fourth quarter of 2019 - which give an indication of forward rate expectations - also rose on Friday to 88 Worldscale points, from 85 on Thursday.

The rates for loading Middle East crude to west coast India in the second week of October jumped 28% to 80-92.5 points after Reliance Industries Ltd booked two supertankers overnight, industry sources said.

But there was also uncertainty over how widely the sanctions on the COSCO units - COSCO Shipping Tanker (Dalian) Co, Ltd and its subsidiary COSCO Shipping Tanker (Dalian) Seaman & Ship Management Co, Ltd - would be implemented.

COSCO Shipping Tanker (Dalian) owns and manages at least 36 tankers for crude and refined products, including 18 VLCCs, according to shipping sources and Refinitiv data.

At least three ships linked to COSCO Shipping Tanker (Dalian) scheduled to load oil from the United States and Brazil were cancelled, oil and shipping sources said.

"There's confusion in the market for those who has fixed the COSCO's vessels. Everyone wants to avoid exposure to U.S. sanctions," a Singapore-based trader said.

Provisional bookings for VLCCs Cosmerry Lake and Yuan Qiu Hu to load U.S. oil in the second half of October were scrapped.

Cosmerry Lake, owned by Cosmerry Lake Maritime Inc and managed by COSCO Shipping Tanker (Dalian), is floating off the U.S. Gulf. Yuan Qiu Hu, owned and managed by COSCO Shipping Tanker (Dalian), is on its way to the U.S. Gulf.

A third COSCO-linked supertanker was chartered to load in Brazil, but it has been replaced by another vessel, a source with knowledge of the matter said.

Contacted by Reuters, an official at COSCO said the impact of the sanctions was being examined.

"(The) company is assessing the situation and impact internally as soon as possible, but so far we don't have anything to update you," said Zhang Zheng, an investor relations official with COSCO Shipping Energy Transportation, parent of COSCO Shipping Tanker (Dalian) Co, Ltd.

Trading in shares of COSCO Shipping Energy Transportation was halted on Thursday after the news on the sanctions.


Industry sources said some buyers were holding off while they check with legal teams to better understand the impact of the sanctions.

"The market is fearful of sanctions so refiners are taking some preventive measures. We'll have to see how widely implemented the sanctions will be," said KY Lin, spokesman for Taiwanese refiner Formosa Petrochemical, a major crude oil buyer in Asia.

Friday's jolt comes after turmoil in mid-September with drone and missile strikes on key Saudi Arabian oil production facilities, which roiled global markets and pushed tanker rates higher. The COSCO vessels are equal to about 7.5% of the world's fleet of supertankers, according to Refinitiv data.

"Charterers are in trouble," a North Asian shipbroker said, declining to be named citing company policy. "It was terrible news for every one of us with the Saudi drone attack, and now the market has to deal with U.S. sanctions on COSCO."

"Good news for owners, good time for them to earn money," the broker said.

MAP: Global oil shippers reel after U.S. sanctions world’s largest oil tanker fleet - https://fingfx.thomsonreuters.com/gfx/ce/7/6659/6641/COSCOVLCCs.png

On Thursday, Unipec, the trading arm of Asia's largest refiner Sinopec and India's largest refiner Indian Oil Corp, cancelled bookings of some COSCO ships and scrambled to find alternative ships to move their crude on.[

"Rates have definitely been pushed higher by these sanctions," said an executive at a top shipbroker in Singapore, adding that ships carrying Middle East and U.S. crude to Asia were subject to the biggest impact. The broker declined to be identified, citing company policy.

Freight rates for shipping naphtha and other clean oil products were also affected with those from the Middle East to Japan jumping 13% to their highest levels in nearly two weeks, according to industry sources and Refinitiv data.


While diplomatic tensions between the United States and Iran remain high, a British-flagged tanker that had been detained by Iran in the Strait of Hormuz on Friday left Bandar Abbas port heading for international waters after being held since July.

"Global trade relies on the safe passage of goods. Without this, consumers and businesses could suffer with increased costs, particularly at the petrol pump," said Bob Sanguinetti, chief executive of the UK Chamber of Shipping trade association.

(Reporting by Florence Tan, Chen Aizhu and Roslan Khasawneh and Jonathan Saul; writing by Gavin Maguire; Editing by Kenneth Maxwell, Jason Neely and Alex Richardson)

By Florence Tan, Chen Aizhu and Jonathan Saul

Stocks mentioned in the article
ChangeLast1st jan.
CHINA PETROLEUM & CHEMICAL CORPORATION -0.99% 3.99 End-of-day quote.-21.92%
COSCO SHIPPING ENERGY TRANSPORTATION CO., LTD. -1.07% 7.41 End-of-day quote.16.14%
FORMOSA PETROCHEMICAL CORPORATION -0.60% 82.2 End-of-day quote.-15.69%
INDIAN OIL CORPORATION LIMITED -0.92% 86.4 End-of-day quote.-31.18%
JASON CO., LTD. -2.65% 807 End-of-day quote.121.70%
LINE CORPORATION 0.19% 5390 End-of-day quote.0.75%
LONDON BRENT OIL -1.28% 44.52 Delayed Quote.-31.33%
RELIANCE INDUSTRIES LTD 0.58% 2146.45 End-of-day quote.41.77%
SAUDI ARABIAN OIL COMPANY -0.30% 32.95 End-of-day quote.-6.52%
THE GLOBAL LTD. 2.59% 198 End-of-day quote.-57.96%
WORLD CO., LTD. 0.07% 1421 End-of-day quote.-47.19%
share with twitter share with LinkedIn share with facebook
07/06COSCO SHIPPING ENERGY TRANSPORTATION : Ex-dividend day for final dividend
07/01Hudong-Zhonghua signs LNG shipbuilding contract with COSCO Shipping, PetroChi..
01/31U.S. Treasury Removes China's Cosco Shipping Units From Sanctions Blacklist--..
01/31U.S. Treasury Removes China's Cosco Shipping Units From Sanctions Blacklist
01/02COSCO SHIPPING ENERGY TRANSPORTATION : Rules and Procedures of Meetings of the S..
01/02COSCO SHIPPING ENERGY TRANSPORTATION : Rules and Procedures of Meetings of the B..
01/02COSCO SHIPPING ENERGY TRANSPORTATION : Rules and Procedures of Shareholders' Gen..
2019COSCO SHIPPING ENERGY TRANSPORTATION : Major transaction construction of new ves..
More news
Sales 2020 18 156 M 2 606 M 2 606 M
Net income 2020 3 311 M 475 M 475 M
Net Debt 2020 22 795 M 3 272 M 3 272 M
P/E ratio 2020 4,99x
Yield 2020 8,11%
Capitalization 33 182 M 4 281 M 4 763 M
EV / Sales 2020 3,08x
EV / Sales 2021 3,01x
Nbr of Employees 6 929
Free-Float 77,3%
Duration : Period :
COSCO SHIPPING Energy Transportation Co., Ltd. Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends COSCO SHIPPING ENERGY TRAN
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus BUY
Number of Analysts 6
Average target price 5,25 CNY
Last Close Price 3,51 CNY
Spread / Highest target 83,2%
Spread / Average Target 49,6%
Spread / Lowest Target 18,4%
EPS Revisions
Mai Jin Zhu President, General Manager & Executive Director
Han Bo Liu Chairman
Yi Weng Chairman-Supervisory Board
Xiang Yongmin Chief Financial Officer
Siong Seng Teo Independent Non-Executive Director