US sanctions on Venezuela are driving freight rates for clean oil products heading across the Atlantic to the country to enormous premiums, according to shipping reports.
The Torm Lotte, a 50,000 deadweight Medium Range tanker, was heard on subjects on Friday to load a 37,000 mt gasoline cargo from Cartagena, Spain with options to discharge trans-Atlantic at Worldscale 185 points or Venezuela at w270, the latter believed to be its final destination. The tanker has been reported by multiple shipbrokers as chartered by Repsol.
The rate to discharge in Venezuela represents a Worldscale 90 points premium to the freight rate for loading a cargo in the Mediterranean and discharging in Brazil, currently at w180 according to market participants surveyed.
Repsol and Venezuela’s PDVSA have a term agreement, which sees Venezuela exchange crude for products. Due to the swap deal, Repsol is continuing to look to import gasoline into Venezuela, but rising freight costs have become an issue.
“There could be many reasons for the premium being this high, but it could be as simple as this being the only owner agreeing to go there,” said a shipbroker.
According to S&P Global Platts software cFlow, the Torm Lotte was off the coast of Morocco on Friday, 424 nautical miles from the port of Cartagena, Spain.
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