Oil traders in the Americas canceled bookings of tankers operated by Chinese shipping giant Cosco and scrambled for replacements following the imposition of US sanctions on two Cosco subsidiaries.
The surge in demand for replacement tonnage in the Americas caused very large crude carrier (VLCC) rates in the US Gulf coast-China route to jump by 19 percent to $9.6 million lump sum. This follows a spate of cancellations of Cosco tankers in the Mideast Gulf that caused a similar rate increase.
Even though the US clarified that the sanctions do not target parent company Cosco Shipping, the group's opaque ownership structure, a common attribute of global shipping companies, caused confusion among charterers as to which of Cosco's 151 tankers were under sanctions.
US officials did not appear to be aware of the effect the Cosco sanctions have had on the tanker market.
Shipbrokers said that at least three Cosco-operated VLCCs were dropped from scheduled loadings of US crude. This led to several traders securing tonnage located as far away as north China as replacements, according to one shipbroker.
US producer Occidental Petroleum dropped its booking of the Cosco-operated Coswish Lake VLCC to load at Corpus Christi Ingleside, and booked one Suezmax, the Stena Supreme, and sought a second one to carry the cargo.
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Tags: AlwaysFree,Americas,Asia Pacific,China,Crude Oil,EN ALWAYSFREE,Energy & Feedstocks,English,Northeast Asia,Sustainability,United States COSCO,Cosco sanctions,Cosco subsidiaries
Published on September 30, 2019 7:39 PM (GMT+8)Last Updated on December 30, 2019 7:09 PM (GMT+8)
