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LONDON—Nobu
Su, a shipping investor who predicted oil-tanker rates
would double six months ago, said he expects rental
costs to advance threefold by the first quarter of next
year as energy prices gain on political instability.
With a
fleet of 20 very large crude carriers, or VLCCs, Su is
now the third-largest operator in the single-voyage or
spot market, behind Frontline Ltd. and Tankers
International Ltd. Su, chief executive officer of TMT
Co. Ltd., said in February the cost of hiring a VLCC
would gain because ships were traveling farther.
“Winter
will be very strong,” Su said in an interview in London
Monday. Political instability will cause oil prices to
strengthen, increasing demand for tankers from
refineries seeking to secure supply, he said.
The cost
of shipping Saudi Arabian crude oil to Japan, the
industry benchmark, doubled to 244.53 Worldscale points
on July 1 from 122.19 points when Su made his
prediction. Rental income since then has dropped 80
percent to $29,279 a day, on signs that higher oil
prices are reducing consumption.
Chinese
crude-oil imports fell to their lowest this year,
curbing demand for shipping, as high prices discouraged
refineries from buying cargoes, the nation’s Customs
General Administration said on its web site Monday.
In the
US, gasoline consumption has fallen for 15 weeks,
according to an August 5 MasterCard survey. At least 24
airlines filed for bankruptcy or stopped flying because
of fuel costs.
Crude
oil traded in New York has declined about 23 percent
since reaching a record $147.27 a barrel on July 11. The
fuel traded at $113.43 a barrel as of 7:18 a.m. Tuesday
in London.
Ship
owners are responding to the slump by telling captains
to sail their tankers more slowly, three ship brokers
said August 5. The last time that happened, in the final
quarter of 2007, the market posted its biggest two-month
gain in rates for at least 16 years in November and
December.
Jens
Martin Jensen, interim CEO of Frontline’s management
unit, said July 10 that tanker owners would “soon”
consider sailing slower again.
Su, 49,
and known in the industry as “Elephant Man” because some
of his vessels’ names end with “Elephant,” said he would
see if his competitors slowed down before deciding
whether to give his captains the same order.
Su
started moving his VLCCs into the western hemisphere
three weeks ago because his competitors were moving
their ships into the Persian Gulf region. The redeployed
ships will arrive by the beginning of next month, he
said.
Su took
control of TMT in 2000 after the death of his father,
Ching Wun Su. He made $1 billion in 2006 betting coal
and iron-ore shipping costs would gain, according to
TradeWinds newspaper. The company was formed in 1958.
Worldscale points are a percentage of a nominal rate, or
flat rate, for more than 320,000 specific routes. Flat
rates for every voyage, quoted in US dollars a ton, are
revised annually by the Worldscale Association in London
to reflect changing fuel costs, port tariffs and
exchange rates.
Each
flat-rate assessment gives owners and oil companies a
starting point for negotiating hire rates without having
to calculate the value of each deal from scratch.
(Bloomberg) |
