Survey Reveals VLCC Surplus Swell in Middle East

According to a Bloomberg News survey of shipbrokers and owners, the oil tanker supply seeking 2million barrel cargoes of crude from ports in the Middle East have considerably risen in the past week.

Over the next month, VLCCs, or very large crude carriers, competing for cargo rose from 1% to 15%.  The jump was calculated from survey results of 5 brokers, 1 owner. 

The Saudi Arabia to Japan course that is so often used for freight derivatives saw a 24% decline in VLCC earnings to $2,631 a day, the Baltic Exchange reported. 

This figure is less than 1/10th of what Frontline Ltd., the largest operator of the VLCCS, stated in May that they were hoping to attain.  Frontline needs to secure $29,700 a day to break even on the vessels.

Frontline's VLCC, Ovatella.  Photo courtesy of Frontline Ltd.