SINGAPORE: Shifting trade patterns and China’s growing love affair with the car will help fuel an increase in shipping costs for very large oil tankers, ship brokers and owners said.

A rise in charter rates could help shipowners return to profitability: earnings from very large crude carriers (VLCCs) currently fail to cover ship operating costs.

Spot charter rates for a 300,000 deadweight ton (dwt) VLCC are around $10,000 per day, but operating costs including crew, repair and maintenance plus insurance are around $12,300, according to estimates from shipping consultant Drewry.

“Very big structural changes are coming with more long-haul trades,” said Nicolai Hansteen, senior shipping analyst at Pareto Securities.

This will see more oil shipped on VLCCs from West Africa and the Caribbean to China and the rest of Asia, he said.

While China has ramped up its imports of crude from West Africa in the last few months, the shift in trade patterns “is a story for next year,” said Henry Curra, head of research at shipbroker ACM Shipping in Singapore.

“Although with the return of Libyan crude exports and Iraq coming out of maintenance, Nigeria is probably already looking for Asian buyers to replace lost European demand for West Africa barrels,” Curra added.

Peter Sand, chief shipping analyst with trade group BIMCO, said China would be shopping around.

“This trend is here to stay, as China will avoid being too dependent on a few suppliers. This is also a geopolitical game, as China seeks to diversify its sources of imports,” he said.

Imports could also favor sulphur-rich sour crude from Venezuela and Colombia because refineries in China are geared to processing sour crudes rather than sweet crudes from countries such as Nigeria and Angola.

Around 25 million tons of crude oil was transported from the Caribbean to Asia in 2010. That had doubled to around 50 million tons in 2012 and Hansteen said it was expected to double again toward the end of this decade.

US imports have been falling since 2005 due to rising domestic production and increased fuel efficiency.