The cost of sending crude oil cargoes from West Africa to Northwest Europe on Suezmaxes has dropped to the lowest level in over 14 years, Platts data has shown.
The WAF-UK Continent route, basis 130,000 mt, was assessed 5 points lower at Worldscale 35 Wednesday. This equates to $5.05/mt, which is the lowest since a $3.95/mt assessment on June 21, 2002.
This came after BP was heard to have placed the Ottoman Tenacity on subjects at w35 for an Angola-Rotterdam voyage on August 27. A source close to the deal confirmed the fixture.
Repsol was heard to have received eight offers Thursday for a WAF-Spain voyage on September 1, although there was said to be a little resistance among shipowners to repeating the rate BP had done the previous day.
“Some ships have been prompt for so long that whatever they do they will lose money. I don’t know why they don’t take the counter at w35,” said a shipbroker.
The continued force majeures at Nigerian oil terminals such as Forcados, Qua Iboe and Brass River has substantially curbed demand for Suezmaxes in the region in recent months, and caused the WAF tonnage list to swell to levels rarely seen by veteran market participants.
According to one shipbroker’s position list there were 32 ships available prior to the start of the current fixing window, versus a three-month average of 14.8 ships. There were also 29 ships that were free of cargo which could make the WAF fixing window.
The number of ships means that each cargo that is shown to multiple owners attracts multiple offers and allows charterers to drive freight rates downwards.