The day rate for chartering a very large crude carrier (VLCC) topped $100,000 this week, with average time charter rates now at their highest in more than two years, Lloyd's List reported on Friday, citing data from the Baltic Exchange.
The day rates for hiring supertankers have seen an uptick this week as signs have emerged that Chinese refiners are starting to increase purchases of crude oil, according to Lloyd's List.
The latest batch of Chinese crude import quotas is likely helping the ramp-up of crude buying amid tentative signs of a recovery in demand and very tight fuel markets outside Asia.
At the end of September, China issued its biggest fuel export quotas to its refiners for this year. Chinese authorities have allocated 15 million tons of new fuel export quotas to its major refiners, and the quota could be rolled over into early next year. The fresh batch of fuel export quotas was widely expected in a move seen as an attempt from China to revive its economic activity, which has suffered from snap COVID lockdowns and a real estate crisis since the spring.
At the same time, Asian fuel sellers are said to be increasing their shipments of diesel to energy-starved Europe, benefiting from the premium European buyers are willing to pay for the fuel amid a deepening global and regional deficit.
Global diesel inventories have declined precipitously since demand rebounded over the last two years, largely due to a decline in refinery capacity during the pandemic.
More exports of fuels from China could alleviate the product market globally ahead of the EU embargo on imports by sea of Russian crude and refined products expected to kick in on December 5.
Tanker operators expect the oil tanker market and the day rates to remain strong over the next year or two, as the displacement of Russian oil exports away from Europe means many tankers would be tied up on longer routes to Asia instead of previously much shorter routes from the Russian Baltic ports to refining hubs in north Europe.
By Michael Kern for Oilprice.com
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Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com, More
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