Daily VLCC tanker rates have doubled to nearly $75,000
Huge oil tanker traffic jam builds at Iraq's Basra port
SINGAPORE, April 6, 2016
A traffic jam of nearly 30 large oil tankers has built up outside the Iraqi port of Basra due to loading delays, with some waiting up to three weeks and costing ship operators around $75,000 a day per vessel.
Shippers and port sources said more delays are expected throughout April as the city's facilities struggle to cope with Iraq's soaring crude output.
The problems at Basra, coupled with continuing storage tank shortages in China, have pushed supertanker rates from the Middle East to Asia to unseasonal highs as the delays disrupt future sailing schedules and charterers cover future tonnage requirements.
"The VLCC (very large crude carrier) market is being sustained by a whole pattern of delays and congestion, affecting ports in Basra," said Ralph Leszczynski, head of research at ship broker Banchero Costa in Singapore, adding that there were further delays in China and South Korea.
There are 27 VLCCs and suezmax tankers with a combined capacity of 43 million barrels, waiting off Basra, shipping data on the Reuters Eikon terminal showed, about twice the norm.
The delays are likely to continue throughout April and could only ease in May, said Omar Al Jarah, a surveyor at maritime consultancy Alwan Marine in Sharjah, as the port struggles with the country's rising crude output.
Iraq exported an average of 3.26 million barrels of oil per day (bpd) through its southern terminals in March, up from 3.22 million bpd the previous month and just 2.5 million bpd in 2010.
EIGHT KILOMETRE QUEUE
Some of the tankers, which would stretch more than 8 kms (5 miles) if placed end-to-end, have been waiting three weeks to load crude from Basra Oil Terminal, according to ship tracking data and port agents.
Sources said the current waiting time to load Basra heavy crude is 18-19 days, compared with an average time of 5-10 days.
In Baghdad, Iraqi oil ministry spokesman Asim Jihad said the wait is due to bad weather and should not exceed 15 days.
Basra Oil Terminal has seven loading berths but only a single point mooring facility, SPM No. 3, is being used to load Iraqi heavy crude, port agents and brokers said.
Three of the terminal's berths are closed for maintenance, a Singapore-based tanker broker said.
Rough weather is making it difficult for pilot boats to operate which is adding to the delays, Al Jarah said.
As the delays bind tankers outside Basra, rates for very large crude carriers (VLCCs) jumped from around 50 on the Worldscale measure on March 1 to around 90 on April 1, doubling in cost from $37,250 to $74,700 per day, shipping data showed.
The captain of one ship that has been waiting for two weeks told Reuters by phone he had been given no information when the ship would be allowed to moor and load cargo.
"We've been given no details," he said, declining to be identified as he was not authorised to speak to media. --Reuters
