The cost of taking crude oil on the cross-Mediterranean route on Aframax vessels has fallen to a seven-month low due to a tonnage list that has lengthened rapidly in the past few weeks, sources said.
With delays in the Turkish strait at one day both northbound and southbound and minimal bad weather and sea fog, charterers have been able to pressure freight rates, leaving shipowners to complain that current rates are pushing earnings close to operating costs, sources said.
The cross-Mediterranean Aframax route, basis 80,000 mt, was assessed at $6.15/mt Tuesday, the lowest since $6.08/mt on November 7, S&P Global Platts data showed.
The Aframax market tends to slow in the summer months due to weaker demand for crude oil, but the supply of crude in the Mediterranean has actually increased in recent months, sources said.
Libyan production reached 730,000 b/d in May, the highest since October 2014 and has now reached 900,000 b/d after output resumed at the Laheeb oil field in the Sirte basin after eight months being out of action, sources said.
Also, the Ceyhan July program has increased and loadings of Azeri light crude are scheduled to rise 2.95 million barrels from June.