Leveraging Flat Rates

Each year, the Worldscale Association adjusts the flat rates which serve as the starting point for negotiating the cost of carrying crude oil and refined products on tankers. Under normal conditions, this annual revision ritual does not have a dramatic impact on tanker markets, aside from forcing owners and charterers to adjust to the new rates during the first weeks of the year.  Following five straight years of flat rate increases, Worldscale’s downward revision of its 2010 flat rates, announced yesterday, reverses some 2009’s usual characteristics rates and sets the stage for another round of negotiation between owners and charterers at year’s end. Download here