US Gulf Coast tanker market tightens as Asia seeks to replace lost supply

By Anushree Mukherjee and Shariq Khan

April 1 (Reuters) - Oil tanker availability on the U.S. Gulf Coast has dropped sharply successful caller weeks, arsenic Asian and European refiners chopped disconnected from Middle ‌Eastern proviso person been snapping up vessels to import lipid and substance from the United States, shipping ‌analysts and traders said.

The Iran warfare has stalled tanker movements done the Strait of Hormuz, curbing the travel of Middle Eastern lipid to ​Asia and Europe, and prompting refiners determination to bargain replacement barrels from the United States, Brazil and West Africa.

Wider discounts connected U.S. crude lipid compared to planetary benchmark Brent crude person spurred request for tankers successful the U.S. Gulf Coast, reducing vas availability successful the region, said Aristidis Alafouzos, main enforcement serviceman of Okeanis ECO Tankers.

U.S. West Texas ‌Intermediate crude futures for June transportation were ⁠trading astatine an implicit $10 discount to June Brent futures connected Wednesday.

"The resulting surge successful freight rates is unprecedented, with Suezmaxes and Aframaxes earning upwards of $300,000, compared to an mean $60,000 ⁠over the past 5 months," Alafouzos said.

POTENTIAL COST TO CONSUMERS

Skyrocketing freight rates summation the outgo of moving lipid and substance astir the world, which analysts fearfulness could deed economical enactment arsenic the prices get passed connected to consumers via the ​cost of ​everyday goods.

Net vas availability on the U.S. Gulf Coast has ​declined 41% implicit the past month, according ‌to information from The Signal Group, a shipping analytics platform. Availability of Very Large Crude Carriers (VLCC), which tin transportation astir 2 cardinal barrels of crude, halved to 10 vessels arsenic of past week, from 20 connected March 1, the information showed.

Smaller Suezmax and Aframax vessels, which tin load astir 1 cardinal and 750,000 barrels respectively, person besides been successful choky supply, The Signal Group information showed. Since the extremity of January, Suezmax tanker availability on the ‌U.S. Gulf Coast has dropped by astir 40-45%, portion Aframax ​supply has dropped astir 70% from a mid-February peak, said Maria ​Bertzeletou, elder marketplace expert astatine The Signal Group.

The ​tightness has coincided with accrued fixture enactment connected the U.S. Gulf Coast to Asia route, ‌Bertzeletou said.

The Signal Group information showed astatine slightest ​10 vessels person been fixed ​to haul lipid oregon substance from the U.S. Gulf Coast to Asian markets implicit the past 7 days, destined chiefly for Pakistan, Korea and South China.

The question of cargoes from the West to the ​East, starting with VLCCs to Asia ‌and past smaller sizes catering to European demand, gave commencement to an unprecedented surge successful freight ​rates, said Matias Togni, lipid and shipping expert astatine NextBarrel.

(Reporting by Anushree Mukherjee successful Bengaluru and ​Shariq Khan successful New York; Editing by Emelia Sithole-Matarise)