Gulf to Japan VLCC freight hits four-year low partly due to Opec cuts

London: The world’s main crude export route sank to a four-year low last Tuesday, hit by strong fleet supply, long-standing Opec cuts and refinery maintenance in Asia, according to brokers and analysts.

The Very Large Crude Carrier (VLCC) route from the Gulf to Japan struck W50 – its lowest level since October 2003, according to Reuters data.
The London Baltic Exchange confirmed the physical spot trade on the route at W49.97 – an average between single and double-hulled oil tankers on the long-haul voyage.

Japan is Asia’s biggest importer of crude oil, closely followed by China. More than two-thirds of the Gulf’s oil flows to Asia.

Brokers Simpson, Spence & Young cited a bout of refinery maintenance in Japan at the end of August and South Korea as a further reasons for the weakness.

Other core rates from the Gulf to the United States and out of the Atlantic Basin – West Africa and the North Sea – to the United States have already struck four-year lows.

Gulfnews