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Global VLCC Tracker: Middle East sailings at multi-month lows

Highlights

* Middle East's weekly outflow drops to pre-summer lows
* Saudi August departures at four-month low
* China takes 11 VLCCs from Angola in August

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The fall in demand to move crude has caused Middle East outflows to tumble to their lowest since before the summer, Platts ship-tracking tool cFlow showed Wednesday, resulting in numerous VLCCs being idled for longer while ample supply and low bunker fuel prices have continued to push down freight rates.

Over the week to Wednesday, sailings from Saudi Arabia, Iraq's Basrah, Iran and the wider Middle East hit their lowest since before the start of June, cFlow data showed, as refinery run cuts across parts of Asia have weakened demand.


Departures from Saudi Arabia fell to 24 from 30 last week, while total sailings for August slipped to a four-month low of 125 VLCCs, down from 137 in July.

From Iraq's southern terminals, five tankers left over the week, while in August, a total of 36 departed, up from 34. Despite the slight uptick in VLCC sailings, crude oil exports from Basrah on all ship-types fell in August, to 3.021 million b/d, a drop of 43,000 b/d from July. Oil ministry spokesman Asim Jihad, however, said the fall was due to a technical fault in the export system.

Iranian weekly sailings dipped to three, the lowest since mid-July, while total departures for August fell to nine, a low so far this year.

Total outflow from the Middle East -- or the count of ships that left the region -- sank to 19 from 24 last week, also the least since before June.

The volume of outflow from the Middle East is typically lower than the count of ships leaving the region's individual ports because over a quarter of VLCCs tend to co-load.

Elsewhere, West African departures -- excluding vessels going to go co-load -- slipped to six from nine, and were last lower the week ending July 22. Total August sailings fell to a two-month low of 29 from 32 in July.

Within West Africa, Angolan departures fell to a three-week low of two, down from three the previous week. In August, a total of 15 ships left, with 11 going to China, which typically takes around two thirds of VLCC sailings from Angola -- currently its second largest supplier of crude after Saudi Arabia.

In January-August, just over 80 VLCCs have sailed from Angola to China.

The US also takes crude oil from Angola -- its 10th-largest supplier -- at 100,000 b/d in June, however, the boom in US tight oil production has caused this flow to drop by three quarters from around an average 400,000 b/d in 2010. However, the bulk of the cargoes are hauled on Suezmaxes, with no VLCCs making the voyage this year, while only one went in 2014.

In weekly arrivals, total landings across North Asia -- China, Japan, South Korea and Taiwan -- rebounded to a three-week high of 42 VLCCs. China's tanker inflows rose to 21 from 15, while Japan's arrivals more than doubled to 13 from six. Into South Korea, eight ships landed, up from four, while arrivals in Taiwan dipped to two from three.

Indian landings edged lower slightly, falling to eight from nine.

CURRENT LOCATIONS/DESTINATIONS

The majority of the global VLCC fleet Wednesday was tracked in the Middle East, at 155 vessels, down from 158 last week. Southeast Asia was the second most concentrated region, at 137 ships, a drop of 14, while 66 tankers were observed in transit off the coast of India/Pakistan, up from 63.

In Basrah, the pool of VLCCs waiting to load rose to nine from eight last week.

The volume of VLCCs ballasting to the Middle East fell Wednesday, to 84 from 86 the previous week. To China, the count of ships widened to 76 from 73, while the number of vessels destined for South Korea narrowed to 25 from 36.

The pool of tankers headed for Japan shrank to 23 from 25, against a count of seven that sailed for Taiwan, flat on the week.

Thirteen ships were ballasting to West Africa, down from 14, while the volume of tankers heading to the UK-Continent fell to five from six.

FREIGHT RATES

Weekly average freight rates increased marginally, as resistance from owners and inquiries for crude oil floating storage in Singapore and the Persian Gulf lent a degree of support. Given that land-based storage in Europe and places like Saldanha Bay in South Africa are almost full -- while Brent and fuel oil prices have slumped -- floating storage is looking increasingly attractive.

On benchmark VLCC routes, weekly rates from PG to Japan rose to Worldscale 32.55, up some 9% from last week, yet still lower by over 25% from four weeks ago. PG-China rates rebounded to w32.10, marking the same weekly percentage increase, according to Platts assessments.

From West Africa to the Far East, weekly average rates fell slightly to w40.88, a drop of 2% week on week, but down by 16% from a month earlier. Elsewhere, rates from the Persian Gulf to west coast India rose 1% on the week to w35.80 but were nearly 40% lower on the month.

--Sierra Highcloud, sierra.highcloud@platts.com
--Edited by Jonathan Dart, jonathan.dart@platts.com