Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  News  >  Companies  >  All News

News : Companies
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance ProfessionalsCalendarSectors

Explainer: Disruptions in the global shipping industry

share with twitter share with LinkedIn share with facebook
share via e-mail
0
10/07/2019 | 05:45pm EST
FILE PHOTO: A view a  VLCC supertanker in the waters off Jurong Island in Singapore

(Reuters) - Oil shipping rates are soaring following a series of sanctions on a Chinese transportation giant and limitations placed on movement of Venezuelan crude oil tankers.

WHAT HAS HAPPENED TO SHIPPING RATES?

The cost of chartering a supertanker to send crude oil from one country to another is rising sharply. A South Korean importer paid more than $12 million in shipping costs for one crude shipment from the U.S. Gulf Coast. This was followed by Friday's tentative charter of another crude vessel by Occidental Petroleum Corp for $13.25 million to ship in November.

WHAT IS AFFECTING THE COST OF SHIPPING?

The United States in late September imposed sanctions on two units of China's COSCO for their alleged involvement in bringing crude oil from Iran. U.S. Gulf Coast exporters, in turn, have held back from chartering COSCO-linked vessels. COSCO operates more than 50 supertankers, the largest vessels for carrying crude oil or fuel products.

HOW IS VENEZUELA INVOLVED IN THIS?

Last week, Exxon Mobil Corp banned the use of vessels linked to oil flows from Venezuela in the last year, affecting some 250 ships. Exxon is the largest U.S. oil company and a major shipper, and its move caused rates to rise further, market sources have said. The move comes several months after the United States imposed sanctions on Venezuela in an attempt to cut off the nation's oil revenue in a bid to oust President Nicolas Maduro, who is accused of human rights violations and rigging the 2018 presidential election. Maduro calls opposition leader Juan Guaido a U.S. puppet.

DO THE ATTACKS ON SAUDI ARAMCO'S FACILITIES HAVE ANYTHING TO DO WITH THIS?

A small amount. After those attacks last month, shippers worldwide scrambled to secure cargoes for big buyers in Asia, and many of them turned to the United States. That boosted rates, though the current surge is tied more to sanctions on COSCO and Exxon's moves.

WHAT ELSE IS CONTRIBUTING TO RISING RATES?

New maritime rules capping the amount of sulfur used in fuels for shipping have added to rising rates, because they raise the cost for shipowners who had in the past relied on "bunker fuel" - and as of Jan. 1 will have to switch to cleaner-burning marine fuel or diesel fuel.

(Reporting by David Gaffen in New York; Editing by Matthew Lewis)

Stocks mentioned in the article
ChangeLast1st jan.
COSCO SHIPPING ENERGY TRANSPORTATION CO., LTD. 0.18% 5.63 End-of-day quote.26.58%
COSCO SHIPPING HOLDINGS CO., LTD. 0.63% 4.76 End-of-day quote.17.08%
EXXON MOBIL CORPORATION 1.01% 69.19 Delayed Quote.1.47%
LONDON BRENT OIL 1.67% 63.44 Delayed Quote.15.59%
OCCIDENTAL PETROLEUM CORPORATION 3.15% 38.95 Delayed Quote.-38.48%
WTI 1.40% 57.76 Delayed Quote.26.39%
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news "Companies"
05:45aJ&J Rapidly Tested Its Baby Powder After Asbestos Finding -- and the Results Were Complicated
DJ
05:36aAramco IPO range values Saudi oil giant at up to $1.7 trillion
RE
05:20aCERTAINTY DURING UNCERTAIN TIMES : Guess & Co. Corporation Launches Nationwide Advertising Campaign
GL
05:17aSaudi Aramco - the oil colossus
RE
05:17aSaudi Aramco valuation set at up to $1.7 trillion, no overseas roadshows for IPO
RE
04:21aSAUDI ARAMCO WILL NOT MARKET IPO IN THE UNITED STATES : sources
RE
03:38aAirbus-backed tournament unveils first electric racing aircraft
RE
03:03aRussia says India delaying signing helicopters deal - executive
RE
03:01aGOLDEN TOBACCO : Galalite Launches the World's Lowest Gain Projection Screen - Mirage XDL 1.2 at Big Cine Expo
AQ
02:50aBAROLO VENTURES : Italy's white truffle hunters worry about climate change
AQ
Latest news "Companies"