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Tankers head into lay up as rates plunge

Singapore: There are 20% more very large crude carriers (VLCCs) in the Middle East for hire over 30 days than there are cargoes that need to be shipped, according to Exim News Service. The fleet of VLCCs has expanded by 6% this year to 529 ships, while the Middle East producers in Opec cut their combined output by 3.7% to 19.3 million barrels a day.
For the average of westbound and eastbound shipments from the Middle East, VLCC owners are making $6,779 a day, nearly half of $12,270 that London-based Drewry Shipping Consultants says owners of supertankers need to pay crew, insurance, repairs and other daily running costs.
Newbuild tanker prices have dropped 40%, market sources say. Reports are emerging of many tanker owners throwing their ships into lay up, Singaporean tanker operator Tanker Pacific being one of the latest with five product carriers sent to lay up. [14/08/09]


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