London: Tanker charter income from the Middle East to Asia, the world's busiest route for supertankers, plunged to the lowest level in ten days, as fuel costs rise and a surplus of tankers remains.
Daily returns for very large crude carriers on the benchmark Saudi Arabia-to-Japan voyage plunged to minus $1,455, according to the Baltic Exchange in London yesterday.
That's the fourth straight day of negative daily earnings, after climbing to a positive $2,037 on August 23, according to the exchange.
"The main reason that we can see, is simply a result of the rise in bunker fuel costs," David Speakman, a broker of physical cargoes at London-based shipbroker Galbraith's Ltd, said by email.
"A jump of almost $10 [Dh36.78] makes a difference."
The price of bunker fuel has risen 30 per cent this year to $661.59 a tonne, according to data compiled by Bloomberg from 25 ports worldwide.
Return journey
Rental income can rise by reducing ship speed on a return journey after a vessel has unloaded its cargo, saving fuel costs.
Charter rates for VLCCs, each able to haul two million barrels of crude, on the benchmark voyage dropped 0.6 per cent to 46.94 Worldscale points, according to the exchange.
The points are a percentage of a nominal rate, or flat rate, for more than 320,000 specific routes.
Flat rates for every voyage, quoted in US dollars per tonne, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.
The Baltic Dirty Tanker Index, an overall measure of shipping crude oil that includes vessels smaller than VLCCs, decreased 0.3 per cent to 677 points, according to the exchange.