Oil Freight Rates Rocket After U.S. Sanctions COSCO

Tom Mulligan
Friday, September 27, 2019

Oil freight rates in the Middle East and Asia have increased by almost 20 percent today following new US sanctions on units of Chinese company COSCO for its alleged involvement in ferrying crude oil out of Iran.

In what the U.S. State Department has described as “one of the largest sanctions actions the U.S. has taken” since restrictions were re-imposed on Iran in November 2018, two units of COSCO, as well as other companies, were named in claims of involvement in sanctions-breaking Iranian oil shipments.

Asian oil buyers have been rushing to the shipping market to charter vessels, with rates for chartering VLCCs to deliver crude oil from the Middle East to Asia increased by almost 19% overnight, however there is also uncertainty over how the sanctions on the COSCO units - COSCO Shipping Tanker (Dalian) Co, Ltd and its subsidiary COSCO Shipping Tanker (Dalian) Seaman & Ship Management Co, Ltd - will be implemented. It has been reported that some oil buyers are delaying hiring COSCO tankers until they have a better understanding of the legal implications of the sanctions.

“The market is fearful of sanctions so refiners are taking some preventive measures. We’ll have to see how widely implemented the sanctions will be,” commented KY Lin, a spokesman for Taiwanese refiner Formosa Petrochemical, a major crude oil buyer in Asia.

Trading in shares of COSCO Shipping Energy Transportation remain halted following Thursday’s announcement of the new US sanctions. 

(Source: Reuters)

Categories: Contracts Tankers Bulk Carriers Energy Logistics Offshore Energy

Related Stories

Thailand's PTT to Buy LNG from Glenfarne's Alaska LNG Project

Japanese Oil and Gas Firm Enters Two Blocks off Malaysia

MODEC and Terra Drone Renew FPSO Drone Inspection Partnership

French Oil Major Acquires Interests in Multiple Blocks in Southeast Asia

CNOOC Starts Production at Offshore Field in South China Sea

CDWE Wraps Up Pin Pile Installation Job for Taiwanese Offshore Wind Farm

TPAO, SOCAR and BP to Ink Caspian Sea Oil and Gas Production Deal

OMV Exits Ghasha Gas Project off UAE with Lukoil Stake Sale

China's Sinopec Laucnhes $690M Hydrogen Venture Capital Funds

Argentina YPF to Shed Offshore Exploration Projects

Current News

CNOOC Signs Hydrocarbons Exploration and Production Deal with Kazakhstan

Thailand's PTT to Buy LNG from Glenfarne's Alaska LNG Project

Woodside and Jera Agree LNG Cargoes Supply for Japan’s Winter Period

Petronas Expands Suriname Portfolio with Deepwater Block Acquisition

Japanese Oil and Gas Firm Enters Two Blocks off Malaysia

Yinson Production, “K” LINE Target Europe's CCS with FSIU and LCO2 Solutions

Woodside Agrees Long-Term LNG Supply with Petronas Unit

MODEC and Terra Drone Renew FPSO Drone Inspection Partnership

Yinson Production Closes $1B Investment to Drive Further Growth

Petronas-Eni Upstream Joint Venture to Take Up to Two Years to Set Up

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com