the problem has not gone that Iran managing to to exporting cargoes.

Transcription

1 IRAN BUCK$ THE TREND! 16 th November 2012 While Iran has lost its prominence from front pages of our daily newspapers, problem has not gone away. In September, Iranian crude production was reported to have fallen to 2.63 million b/d, lowest level since However, data just released by IEA shows that Iran s October crude production has risen to 2. 7 million b/d, first increasee in output after seven months of decline following sanctions. At same time exports jumpedd to 1.3 million b/d from 1.0 million b/d recorded for previous two months. Clearly se figures show that Iran is managing to sell crude and perhaps become more inventive in ir approach to exporting cargoes. Iranian owned tonnage continues to defy every obstacle placed in its path and supply thirst of Far Eastern nations and bring much neededd dollars too support regime. China and South Korea are still main destinationss for Iranian crude. Currently C 6 VLCCs appear to be located off Iraniann coast having retained ir original NITC names and original flag state. The last recorded movement forr any of se vessels was in June and y have subsequens ntly turned off ir satellite tracking devices. However, Iran has taken some unusual steps to disguise ir operations with rest of e Iranian tanker fleet having renamed and reflagged. It appears to be business as usual and we are seeing regular movements going East. To emphasize this point, Iran took delivery of a newbuild VLCC inn September, whichh has already been renamed twice and delivered its first cargo to South Korea at e end of October. Iran has 4 more VLCCs scheduled to be delivered between now and June off next year. Cargoes to India appear to be declining and just recently state owned Shipping Corporation of India announced it was giving up itss Iranian connections due to fears of jeopardising ir own business. The remaining Indian cargoes appear to be providing employment for some of Iran s Suezmax fleet. Much coverage has also been given g to Iraniann ship-to-ship transfers t taking place off Malaysia, with protagonists claiming c y are not breaking any a laws. Obviously re are concerns c as to final destinationd ns of any transfer cargoes, c blended or orwise, which w could eventually find ir way w into countries covered by t sanctions. History tells us that sanction s busting is not a new pastime. p As well as NITC tonnage, re t are owners willing to lift Iranian cargoes and explore any legal loopholes in order to take advantagea e of current stand- off. o In end it all boils down to Iran needing export income.

2 CRUDE Middle East Wow! - a 25% increase in Worldscale rates gave VLCC Owners something to shout about - for once. The warning signss were noted last week, as sentiment had shifted,, and when Charterers continued to shovel high volumess into marketplace, only way was up. Rates peaked at just under WS 50 to East and WS 32.5 to West as a result, though re is pressure upon Owners now to suck up as much 'insurance' as possible at new, higher, earning level, and consolidation is present order of day. Suezmaxes, on or hand, had no such joy with sparse volume, and good availability, keeping rates pegged to little better than 130,000 by WS 67.5 eastt and WS 40 West with no sign of change, unless VLCCs do ramp significantly higher. Aframaxes also moved through a dry patch, and rates came under furr pressure to end at around 80,000 by WS 92.5 to Singapore, with furr erosion possible. West Africa As in Middle East, VLCCs hogged limelight, and Suezmaxes suffered from lack of attention. Eastern Charterers dominated proceedings as rise inn Arabian Gulf market pushed ballasting Owners to seek to equalise earnings, and rates moved sharply higher to around WS 49 to East, and close to US$4 million for West Coast India. Suezmaxes languished on thin enquiry, and were forced to accept under 130,000 by WS 55 too US Gulf by weeks' end, and will continue under pressure over near term. Mediterranean Not nearly enough enquiry to drag Aframax market off it s recent 80,000 by WS 75/77.5 bottom for cross Med movements, andd although availability is a little thinner, Charterers shouldd be able too stay firmly in driving seat. Suezmaxes remained stuck at ir recent conference 140, 000 by WS 600 for Black Sea/ Europe runs r with down to WS 50 available transatlantic, and this record looks set to remain stuck in groove over next period also. Caribbean 'What goes up must comee down', and inevitably recent Aframax spike was to prove just that - a spike. Availability began to backfill again, and now rates are on slide with 70,000 x WS 125 upcoastt last marker. VLCCs found lots of suitors, and limited tonnage pool became very finely balanced against demand. Rates moved up impressively to as high as US$4.7 million to Singapore, with US$4.1 askedd for runs to West Coast India, it may prove quiter next week, but rates should hold for interim. i North Sea _ The ice season is still over horizon, and re are few near term positives to boost Aframax sentiment - or rates. Levels stay little better than 80,000 by WS 85 cross UKC, and 100,000 by WS W 57.5 fromm Baltic for now - and for a while yet. Suezmaxes drew a virtual blank but would take cover at about 135,0001 by WS 50 to States S if given opportunity. VLCCs are veryy tight so traders couldn t get much change out o of US$4.50 million to Singapore, and US$6 million to South Korea, which proved hard to conclude successfully.

3 CLEAN PRODUCTS East anticipates activity whilst West remains sporadicc East A volatile week on LRs with LR2s continuing to forge forward and LR1s after a minor blip, taking stock once again. 75,000 mt Naphtha AG/Japan is established at W120 and Owners ambitions are now turning towards W ,000 mt Jet AG/UKC has hit US$3.0 million and once again rates are looking to move higher. Lr1s dipped slightly at start of week with 55,,000 mt Naphtha AG/ Japan fixing at W125, but with more activity later in week rates are back to W ,0000 mt Jet AG/ /UKC having dipped slightly is back to US$2.30 million and may see more paid if markets remain busy. The MR market has really firmed up with tonnage all but cleared out for next 10 days and Charterer's having to take Lr1s to cover MR stems. TC12 is steady WS 150 for time being, but furr firming is likely. WSS 230 basis 35kt is also reported on subs for WCI/Singapore, which is a 20 point move up. East Africa is on subs WS 215 on 35ktt and with tonnage so tight, this is likely to move up. AG too UK Continent is assessed at just over US$ 1.7 million. The shorthauls have been a large driving force for this market, with shorthaul cross cargoes fixing at US$ 340,000. Looking at near future furr firming is expected. Anor week that has proved yet again to problematic for Charterers; freight volatility shows no sign of abating as tonnage lists are still skeletal. This makes it very difficult to put a conference rate on typical trade t routes. This week Korean back haul market is particularly boisterous with Owners talking 520k plus/minus a lot depending on dates. The Singapore /Australia market is also firm and trying to find a ship for Singapore loading off November is a thankless task, Ownerss are pushing for upwards of30 x WS 220 for prompt liftings although less is achievable on forward dates. The Transpacifc MR market is hovering at last done levels of for South Korea /USWC but ree is an increased interest in this voyage consequently Owner will try and push for higher numbers. LR1s are equally hard to predict, last done for this voyage is US$ 1.8 mill but even though this sector is not particularly firm a significant amount of tonnage has been fixed this week and last done will be difficult to achieve. Mediterranean The USG/Caribbean sea market has come off somewhat this week with backhaul distilllate stems fixing at 38 x WS levels. Enquiry has been quieter but re is still enough to keep tonnage stateside for now. For Caribbean Sea up u market Owners ideas have held around 38 x WS160 levels alsoo however market needs testing There has beenn a slightly slower amount of fixing and enquiry to end week in Mediterranean and Black Sea, although enough e activity to keep levels stable. For both Cross med trades andd black sea exports handys are resisting pressure and aree trading sideways at 30 x 160 levels. Looking at list re is some prompt tonnage as we go into weekend w with a few late runners opening up and ships failing. For MRs employment opportunities remain plentiful and as itt standing in med stems enquiry showingg in second half of month is outstripping MRs withh firm Med positions. For Med- for TA 37 x 140/150 is on subs for TA/BRZ at time t of writing 35KT NAP so quite a premium considering TC2 is trading sideways at 37 x ws levels. Quiet for enquiry heading East this week but t we would maintain Owners ideas for MR stems into Redd Sea and AG at around US$ 750L/850K levels respectiively. On bigger ships, Lr2s weree reported arranged for STS med Japan at US$2.4Million. UK Continent Fixtures on Continent C have been relatively steady this week. Tc2 was fixing around WS depending on load area, options etc. Theree is still a lack of ballasters from US as markets m on that side of t pond remain strong enough to t keep vessels in area. The handies cross Cont havee been quiet, and fixing WS basis 30kt, whilst flexi'ss have beenn trading WSS basis 22kt. LR1's started busy fixing 60 x 120 numerous times, but enquiry tailed off towards e end of week. LR2's were very tight this week, w and we saw Owners achieving as much as USD 2.7m ex Norwayy for Japan discharge. Caribbean

4 DIRTY PRODUCTS Handy UKC: Market détente in Continent during this week of trading with tonnage availability being very thin and cargo volume low for 30kt stems. The week started delicately balanced and had potential to tighten substantially if cargos came early to market. Despite se fears, incremental trading combined with often specific vessels targeted led to a general rate plateau at 30 x WS 160 levels. Expect tonnage to remain tight at beginning of next week as Friday activity has clippedd out some earlier opening vessels in next cargo window. MED: An active start to week in Mediterranean was checked by slow mid-week trading and prevented opportunity for rates to rise. With demand low leading to cheap barrels, trading houses weree active ex Black Sea and in turn clearing all naturally positioned tonnage. With cargos covered up to 26/11 re is possibility for region to tighten as STS operations, forward f covering and vessels doing Med - Cont voyages shorten a tonnage list, particularly in East Med. All depends if destinations are known and wher ships can be pushed or want to be pushed. MR Questions turnedd to answers and indeed cargos in second half of this week t'up North with 3 45kt stems clearing pptt tonnage inn Continent. With vessels now not open until towards end month, it is very tight for tonnage. In e Med, full stems were in minority but 40+ sufficient enough to ensure tonnage moved. Tonnage is available next week butt choice is limited, healthier towards true end month, market just waits for Ras Lanuf activity to pick up agaiin. Panamax Throughout week w demand for Panamax s grew as traders looked too source bblss with November BL s. As a result, fixture by fixture numbers rocketed north bound leaving Charterers dumbfounded that only a week ago levels were beingg fixed at 105. A 35 pointt rate hike in one week is something seldom seen in this sector, something that could well last throughout December program yet to come.

5 Dirty Tanker Spot Market Developments - Spot Worldscale TD3 VLCC AG-Japan TD5 Suezmax WAF-U SAC TD7 Aframax N.Sea-UKC LQM Bunker Price (Fujairah 380 HSFO) Dirty Tanker Spot Market Developments - $/day tce (a) TD3 VLCC AG-Japan +16,000 26,750 10,750 5,500 24,500 20,250 14,500 TD5 Suezmax WAF-U SAC -1,750 10,750 12,500 10,500 17,250 14,500 12,500 TD7 Aframax N.Sea-UKC +0 6,250 6,250 4,750 12,500 9,750 8,250 Clean Tanker Spot Market Developments - Spot Worldscale TC1 LR2 AG-Japan TC2 MR - west UKC-USAC TC5 LR1 AG-Japan TC7 MR - east Singapore-EC Aus LQM Bunker Price (Rotterdam HSFO 380) Clean Tanker Spot Market Developments - $/day tce (a) TC1 LR2 AG-Japan +2,000 23,750 21,750 17,250 TC2 MR - west UKC-USAC -1,250 6,500 7,750 6,750 10,500 9,250 7,750 TC5 LR1 AG-Japan -2,250 17,750 20,000 12,250 13,750 13,750 13,500 TC7 MR - east Singapore-EC Aus ,750 15,500 12,500 (a) based on round voyage economics at 'market' speed (13 knots laden/12 knots ballast) PAT/JCH/TP/JW/JT/SLT Produced by Gibson Consultancy and Research Visit Gibson s website at for latest market information E.A. GIBSON SHIPBROKERS LTD., AUDREY HOUSE, ELY PLACE, LONDON EC1P 1HP Switchboard Telephone: (UK) (International) tanker@eagibson.co.uk TELEX: GTKR G FACSIMILE No: BIMCOM This report has been produced for general information and is not a replacement for specific advice. While market information is believed to be reasonably accurate, it is by its nature subject to limited audits and validations. No responsibility can be accepted for any errors or any consequences arising refrom. No part of report may be reproduced or circulated without our prior written approval. E.A. Gibson Shipbrokers Ltd 2012