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Supertanker fee on benchmark route nears $500,000 a day
Middle East-to-China route was $200,000 before the Iran war
Many of the voyages from inside the Gulf are being conducted on ships controlled by Middle Eastern producers, Sinokor or a handful of smaller risk-tolerant shipping companies willing to enter the contested waterway. (Akio Kon/Bloomberg)
Key Takeaways:
- Supertanker rates on the Middle East-to-China TD3 route approached $500,000 a day Aug. 7 as the Iran war deterred many owners from transiting Hormuz.
- Fewer owners are entering the Persian Gulf after attacks near Hormuz, tightening vessel supply and lifting benchmark earnings from about $200,000 before the war.
- Owners willing to load inside Hormuz continue earning higher rates, while limited deals and disputed assessments keep uncertainty around the benchmark route.
The cost of hiring a supertanker to carry oil on the benchmark Middle East-to-China route approached $500,000 a day, as the Iran war continues to deter many shipowners from entering the Strait of Hormuz.
The latest increase comes after South Korea’s Sinokor Group, the world’s largest supertanker owner, provisionally hired out one of its ships to pick up a cargo from inside the Persian Gulf to Asia at a sky-high rate, according to fixture data. The benchmark route hit the highest since June on Aug. 7.
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Sinokor didn’t respond to a request for comment outside of regular business hours.
With vessels sporadically coming under attack while trying to cross Hormuz, the number of shipowners willing to call at ports inside the Persian Gulf has dwindled, though some do continue to cross the chokepoint. Many of the voyages from inside the Gulf are being conducted on ships controlled by Middle Eastern producers, the secretive Sinokor or a handful of smaller risk-tolerant shipping companies willing to enter the contested waterway.
That in turn has lowered the number of publicly available deals on the route, making it less liquid and trickier to assess the primary benchmark for supertanker earnings. The disruption has led to one of the world’s top commodity traders suing the Baltic Exchange, which publishes the marker.
On Aug. 7, the exchange assessed earnings on the Middle East-to-China route — known in the industry as TD3 — at $498,000 a day. That figure equates to 490 industry-standard worldscale points, a system oil companies and shipowners use to calculate rates. The route is specifically for ships loading at the Saudi port of Ras Tanura.
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Sinokor’s ship was booked at 560 worldscale points, the fixture data showed, though it wasn’t clear exactly which port inside the Persian Gulf the ship was booked from, meaning it’s hard to know the precise rate in dollars a day.
A week earlier, TD3 was assessed at $428,000 a day, and just before the Iran war broke out, it was just over $200,000 a day.
“Owners willing to load inside Hormuz are earning a scarcity premium,” Clarksons Securities analysts including Frode Morkedal wrote in a note, noting that earnings for ships loading in the Gulf of Oman to sail to Asia are lower, at about $147,000 a day.
“The pool of willing owners remains small,” they said, referring to those willing to enter the Persian Gulf.
