The enquiries from the Chinese state energy firms this week follow an interim deal between the United States and Iran to end their war and reopen the Strait of Hormuz, a vital waterway for Middle East energy supplies.
PetroChina had sought a VLCC to load from Iraq’s Basrah Oil terminal between June 25 and 30, two shipping sources said. Each VLCC can carry 2 million barrels of oil.
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The Chinese major received at least six offers at worldscale points of 650 to 750, they said, representing rates nearly triple those charged before the U.S. and Israel launched the war in late February. The worldscale measure is used by the shipping industry to calculate freight rates.
“There are tankers available, but the problem is it’s too expensive and there is no guarantee you can exit the strait,” a PetroChina official said.
One of the shipping sources told Reuters that securing supplies from the Gulf would likely remain complicated despite the peace deal.”It’ll be still difficult to fix a vessel due to the rate, and I assume that both parties need to agree to some special clause (in the contract for transiting the strait),” the source said.
On Thursday, Sinochem sought a VLCC to load oil in the Gulf between June 20 and 30 for Asia, the shipping sources said. It was not immediately clear if the company would succeed in finding a vessel.
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PetroChina and Sinochem did not immediately respond to Reuters’ requests for comment.
IOC, meanwhile, did not receive any offers in a tender last week seeking a VLCC to lift oil from Iraq on June 22 and 23 and deliver to Paradip port on India’s east coast, a source familiar with the matter said.
IOC, India’s largest refiner, subsequently issued a force majeure on the cargo, the source added.
IOC did not immediately respond to a request for comment.