The biggest state-owned refiners in China and India have failed to procure supertankers to load crude from the Persian Gulf later in June as tanker rates are too high and guarantees on safe passage through the Strait of Hormuz lacking, Reuters reported on Thursday, quoting company and shipping sources. 

In the past few days, energy giant PetroChina has received six offers in a tender to procure a very large crude carrier (VLCC) to load Basrah crude from Iraq. PetroChina did not like any of the offers as freight prices were triple compared to the rates from before the war, shipping sources told Reuters.  

PetroChina was hoping to lift Basrah crude between June 25 and 30, but high freight rates are complicating the search for vessels. 

“There are tankers available, but the problem is it's too expensive and there is no guarantee you can exit the strait,” an executive at PetroChina told Reuters. 

Moving crude supply out of the Persian Gulf will likely remain complicated in the near term, one of the shipping sources said. 

“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” on conditions to transit the Strait, the source told Reuters. 

Indian Oil Corporation (IOC), meanwhile, didn’t receive any offers for tankers to load Iraq crude from Basrah early next week, and had to eventually declare force majeure on the cargo, a source with knowledge of the matter told Reuters.  

The U.S.-Iran deal has raised hopes that the oil supply disruption in the Middle East could be nearing its end, but the biggest international tanker operators aren’t rushing to return to the Strait of Hormuz. 

“Given the experiences in the last couple of months, I think it’s reasonable to assume that it may take at least a couple of weeks or if not a month,” Jotaro Tamura, chief executive officer at Mitsui OSK Lines, the world’s largest tanker operator, told the Financial Times in a recent interview.   

Source: Oil Price.Com 

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