Chinese refineries have not imported oil from the United States since March, when Donald Trump’s trade war with Beijing began. However, they are increasing purchases of other oil, which has led to a shortage of supertankers and higher freight prices. With the new rates, it becomes unprofitable to transport oil from the United States to Asia.
“Oil from the United States may become too expensive for Asian buyers due to high tanker rates, which have increased due to increased purchases in China and traders’ expectations of increased supplies from OPEC+ countries,” writes Bloomberg.
Traders told the agency that Chinese refineries are already placing orders for oil, which should arrive by the end of the year in order to use import quotas set by the state.
“The demand for supertankers means that there are fewer ships to transport oil from America to Asia,” writes Bloomberg.
According to the Baltic Exchange, the freight of the supertanker, which can carry more than 300,000 tons of oil, rose above $70,000 per day for the route from the United States to Asia. It’s cheaper than shipping from the Middle East. However, the length of the journey, up to seven weeks, makes the costs high — about $ 37 million. Supertankers go to Asia via Africa. And transportation costs for each barrel have already reached $17. For example, the supertanker Farhah left the American Ingleside on the Gulf of Mexico on September 17, but it will reach the South Korean port of Yosu only on November 10, according to AIS data.
So far, the margin for American oil is still maintained, but further supplies are already in doubt, Bloomberg noted.
Tanker owners are increasingly choosing to leave ships in Asia, where supplies from OPEC+ countries are growing, and this further limits the supply of ships for supplies from the United States, analyst Ed Finley-Richardson from Contango Research told the agency.