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

Russia Targets 2028 for Sakhalin-3 Gas Project Start Up

MDL Secures Cable Laying Job in Asia Pacific

Petronas to Leverage AI to Expedite Oil and Gas Exploration Activities

Aquaterra Energy Nets Subsea Analysis Contracts with INPEX off Indonesia

POSH Set to Tow Nguya FLNG from China to Eni’s Congo Field

PXGEO Nets First Seismic Survey off Malaysia

SPE Offshore Europe 2025 set to drive transformational change for the energy sector

Saipem Marks First Steel Cut for Tangguh UCC Project at Karimun Yard

China Rolls Out 17MW Floating Wind Turbine Prototype

MODEC and Terra Drone Renew FPSO Drone Inspection Partnership

Current News

Propane’s Economic Edge for Ports During Trade Uncertainty

Shell’s Brazil-Bound FPSO Starts Taking Shape

Ventura Offshore’s Semi-Sub Rig to Keep Drilling for Eni in Asia

SBM Offshore, SLB to Optimize FPSO Performance Using AI

MODEC Ramps Up Hammerhead FPSO Work After ExxonMobil's Go-Ahead

Aesen, DOC JV Targets Subsea Cable Logistics

Timor Gap Boosts Stake in Finder Energy’s Timor-Leste Oil Fields

SBM Offshore Starts Construction of FSO for Trion Oil Field off Mexico

Russia Targets 2028 for Sakhalin-3 Gas Project Start Up

Seatrium Secures ABS Backing for Deepwater FPSO Design

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