Mideast shipping rates to increase due to shortage

The cost of shipping Middle East crude to Asia, the world's busiest route for supertankers, may climb for a 16th day because of a shortage of ships.

There are 22 double-hulled very large crude carriers, or VLCCs, for hire within the next 30 days. That's about eight fewer than the likely cargoes that still need to be collected by tankers in July, based on the Paris-based shipbroker's data. "The market is strong," Charlie Fowle, a director at London-based shipbroke Galbraith's Ltd, said. Further gains could be offset by oil companies splitting VLCC cargoes in half and shipping them on smaller tankers that are presently cheaper to hire, he said. Zhuhai Zhenrong Co, a Chinese state-backed oil trader, hired the vessel Hormoz for 245 Worldscale points, according to a report from Athens-based Optima Shipbrokers. That's 6.6 per cent above the London-based Baltic Exchange's benchmark assessment of 229.84 points for cargoes to Asia. Hormoz is fitted with a double hull. Oil companies prefer such vessels because they cut the risk of an oil spill in the event of an accident.

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