All Quiet on the Westbound Front

While the role of the United States as the largest crude oil consumer should not be understated, a change in supply logistics has over time led to a decline in significance of what was once a prominent tanker trade. In 2011 to-date, VLCC rates from the Arabian Gulf to the US Gulf have hardly come up for air at a time when rates to points East from varying load areas have stabilized at more palatable levels to shipowners. Over time, the discount applied to voyages west has increased largely due to the rise in Atlantic loading opportunities to meet heightened eastern demand. On the back of slackened US import needs, shipowners are perhaps even more competitive in seeking these increasingly scarce opportunities. The chart below shows the discount of the Arabian Gulf – LOOP (280kt) versus the benchmark trade Arabian Gulf – Chiba (260kt). Download here