US sanctions hit global oil fleet as traders shun nearly 300 tankers

The missile hit on the Iranian tanker follows attacks on Saudi oil installations, which temporarily pushed up oil prices by 20 percent. (Shutterstock)
Updated 12 October 2019

US sanctions hit global oil fleet as traders shun nearly 300 tankers

  • The move has taken roughly 3 percent of the global oil tanker fleet out of the market

Nearly 300 oil tankers globally have been placed off limits as companies fear violating US sanctions against Iran and Venezuela, driving freight rates to new highs, industry sources said.

The move has taken roughly 3 percent of the global oil tanker fleet out of the market, according to industry sources and data on Refinitiv Eikon, sending rates soaring to secure tankers to ship oil, particularly to Asia.

“Freight rates are going through the roof and people are getting very nervous with the cost of shipping,” a crude oil trader in Asia said on Friday, declining to be identified as he was not authorized to talk to media.

Unipec, the trading arm of China’s Sinopec, Swiss trader Trafigura AG, oil firm Equinor ASA and Exxon Mobil Corp. are shunning 250 tankers which have carried
Venezuelan oil in the past year.

Oil companies are also avoiding 43 oil tankers owned by COSCO Shipping Tanker (Dalian) after the US last month imposed sanctions on two units of Chinese shipping giant COSCO for allegedly
transporting Iranian crude.

COSCO Dalian also owns 3 percent of the global very large crude carrier (VLCC) fleet and the absence of its ships was a key driver for supertanker freight rates which hit new highs daily over the past two weeks, traders and shipbrokers said.

HIGH LIGHTS

  • Exxon, Unipec ban 250 tankers.
  • Sanctions on COSCO Dalian put 43 oil tankers out of reach.
  • Global freight rates surge as tanker fleet dwindles.

“This is now a handicapped set of vessels which are difficult to trade,” Anoop Singh, regional head of tanker research at ship broker Braemar ACM, said, referring to the COSCO Dalian tankers.

Disruptions from the recent attacks on Saudi oil facilities and the ban on ships that called on Venezuelan ports in the past year have exacerbated tightness in the tanker market, he added. Braemar estimates another 23 VLCCs are also out of service to install emissions cleaning equipment to meet stricter global marine fuel rules from January 2020.

VLCC freight rates for key crude oil supply routes to Asia have surged since the US ratcheted up sanctions in recent months.

The Singapore Petroleum Co, wholly owned by PetroChina, has provisionally chartered VLCC Houston to load crude in the Middle East for China in early November at 205 Worldscale points, in what could be the highest rate so far in the market, a trade source who tracks the market closely said on Friday.

The rate was at W67 prior to sanctions, according to a shipbroker.


Arab News recording exposes Nissan lawyer’s lie on IMF bailout for Lebanon

Updated 01 June 2020

Arab News recording exposes Nissan lawyer’s lie on IMF bailout for Lebanon

LONDON: Arab News has published the recording of an interview with a Nissan lawyer after he denied saying that a bailout of Lebanon by the International Monetary Fund (IMF) was linked to the extradition of fugitive tycoon Carlos Ghosn.

The former Nissan chairman fled to Beirut in December from Japan, where he faced charges of financial wrongdoing.

In a story published in Arab News Japan on Saturday, Sakher El Hachem, Nissan’s legal representative in Lebanon, said the multibillion-dollar IMF bailout was contingent on Ghosn being handed back to Japan. 

The lawyer said IMF support for Lebanon required Japan’s agreement. Lebanese officials had told him: “Japan will assist Lebanon if Ghosn gets extradited,” the lawyer said

“For Japan to agree on that they want the Lebanese authorities to extradite Ghosn, otherwise they won’t provide Lebanon with financial assistance. Japan is one of the IMF’s major contributors … if Japan vetoes Lebanon then the IMF won’t give Lebanon money, except after deporting Ghosn.”

On Sunday, El Hachem denied making the comments. “The only thing I told the newspaper was that there should have been a court hearing on April 30 in Lebanon, but it was postponed because of the pandemic,” he said. In response, Arab News published the recording of the interview, in which he can be clearly heard making the statements attributed to him. 

Japan issued an arrest warrant after Ghosn, 66, escaped house arrest and fled the country.

Now listen to the recording: