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VLCC market goes boom as rates soar past $100,000 per day

VLCC market goes boom as rates soar past $100,000 per day
It has been a stellar couple of weeks in the VLCC market where earnings topped $100,000 a day on routes east.

Caribs - Singapore, in particular, was generating a mouth-watering $124,000 a day, for owners with vessels in Europe to ballast across the Atlantic. Earnings Gulf -West, much the weaker partner in the last few years, were not far behind.

Extra stems from Iraq seem to have provided the main impetus for the spike and, as London broker EA Gibson notes, all eyes will be on the November Basrah stem list to see if it replicates October. VLCC spot fixtures in September totalled 195 - a record for this year.

There does not seem to have been much of a trickle-down effect to the other large sizes though suezmax average earnings remain above $40,000 a day and aframaxes above $30,000 a day, and moving up again.

Meanwhile the US House of Representatives voted to overturn the 40-year restrictions on exports of US crude. However the bill did not get enough support to overthrow a presidential veto, and the White House has indicated it will can the bill. The Senate version of the bill also faces an uphill struggle according to commentators.

The case for lifting the ban is that it would help solve the mismatch between US refinery configurations and the type of oil predominantly produced in the US. It would potentially give a further boost to the tanker market though calculating the likely effects on global oil trade flows is a very difficult exercise.