Record US crude oil exports propel supertanker rates to two-year high

An oil tanker is anchored near the Port of Long Beach, California. Giant supertankers that haul crude oil across the globe are making the most money in more than two years, buoyed by swelling shipments from the US and the Middle East.

Giant supertankers that haul crude oil across the globe are making the most money in more than two years, buoyed by swelling shipments from the US and the Middle East. Benchmark earnings for very large crude carriers neared $40,000 a day on Wednesday to hit the highest level since June 2020. Assessments in the industry-standard Worldscale system have jumped almost 40% in a little over a week. Shipowners said the spike was due to an uptick in loadings from the Middle East and the US Gulf. While demand for tankers collapsed when producers cut output early in the pandemic, record US crude exports and a ramp-up in flows from the Organisation of Petroleum Exporting Countries are once again boosting volumes of oil at sea. In addition, redirection of Russian crude flows has upended trade routes and lengthened journeys, further stretching the global fleet. “We now see frenetic activity in all key basins and rates are moving up quickly,” said Lars Barstad, chief executive officer of Frontline Management AS, which runs the ships of one of the world’s largest tanker companies. “Global oil supply has reached a pivotal point with US production, SPR releases and lastly healthy Saudi volumes,” while the rerouting of Russian flows is also boosting the distances ships are covering, according to Barstad. Several other oil tanker sectors have turned steadily more bullish in recent months. Refined product vessels are seeing their strongest market since at least 1997, while smaller crude oil tanker rates have strengthened as a side-effect of Russia’s war in Ukraine. While US exports have been volatile, they touched a record last week at five million barrels a day, according to Energy Information Administration data. Oil flows from the Middle East jumped sharply in July, according to tanker-tracking data compiled by Bloomberg. Shares in tanker companies have been steadily rallying in recent weeks. Euronav NV is trading at its highest level since 2010, while Frontline Ltd and International Seaways Inc are near the highest since 2020.