By Enes Tunagur
LONDON, Oct 16 (Reuters) – The cost of shipping oil on the largest tankers fell this week from record highs as demand eased following a wave of attacks on vessels in the Middle East and as the US considered easing sanctions on the so-called shadow fleet.
Freight rates for supertankers, also known as very large crude carriers (VLCCs), carrying oil from the Gulf of Oman to China fell to about 776 on the Worldscale basis, according to Baltic Exchange data.
That was down from 841 last week, the highest since the rate was launched earlier this year, following gains since the outbreak of the Iran war.
“Gulf of Oman VLCC rates dropped as demand on that route has softened since the fresh attacks, as higher Middle East Gulf freight rates and subsequently lower export volumes have reduced demand on this route,” said Kpler analyst Matthew Wright.
Trump administration comments about potentially removing sanctions on some shadow-fleet tankers drove freight rates lower, Sparta Commodities analyst Michael Ryan said, adding a removal would increase the number of ships that can carry oil.
Despite the drop, rates remain close to record highs. The US-Israeli war on Iran has increased the use of ship-to-ship transfers to move oil out of the Strait of Hormuz, boosting demand for tankers. If elevated shipping costs persist, they could add to inflationary pressures and raise costs for businesses and consumers.
Rates have also eased from record highs on other routes this week, such as from West Africa to Asia.
(Reporting by Enes Tunagur in London. Editing by Alex Lawler and Mark Potter)
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