COSTS for shipping energy cargoes are surging as Europe scrambles for supplies. which creates a shortage of vessels to carry fuel, reports Bloomberg.
Ships are carrying LNG (liquefied natural gas), diesel and crude to Europe from further away than usual to replace Russian energy supplies, as the war in ukraine shows no sign of ending.
That's keeping vessels occupied for longer and delays their return to service, sparking a rally in global freight rates, say shipping experts.
LNG freight rates are at elevated for this time of year and threaten to surpass last year's winter peak. The cost of shipping a US oil cargo to China is at the highest since 2020.
Shipping naphtha petrochemical feedstock from the Middle East to Japan costs more than twice as much as it did in March, according to the Baltic Exchange.
The ship shortage threatens to impact Asian economies that import oil and gas from the US, as they will find it hard to get spare cargoes at short notice if the weather turns cold this winter, said traders and shipowners.
Even petrochemical feedstock shipments are becoming more expensive to transport, further burdening buyers grappling with sluggish demand for chemicals as the pace of manufacturing slows.
There are very few LNG ships available for hire through the winter, and only for short voyages, said Flex LNG Management CEO Oystein Kalleklev. Owners, he said are demanding their vessels back so they'll be available when the Freeport LNG export plant resumes operations.
The Freeport facility in Texas is to restart in November after being hit by a fire in June that knocked out a significant portion of US LNG exports.
As companies book vessels for winter earlier than usual, energy majors are refusing to release LNG ships as they typically do at the end of summer.
Said Xeneta chief analyst Peter Sand: 'What we've seen in shipping this year has been remarkable as a result of the war in Ukraine.'
SeaNews Turkey
Ships are carrying LNG (liquefied natural gas), diesel and crude to Europe from further away than usual to replace Russian energy supplies, as the war in ukraine shows no sign of ending.
That's keeping vessels occupied for longer and delays their return to service, sparking a rally in global freight rates, say shipping experts.
LNG freight rates are at elevated for this time of year and threaten to surpass last year's winter peak. The cost of shipping a US oil cargo to China is at the highest since 2020.
Shipping naphtha petrochemical feedstock from the Middle East to Japan costs more than twice as much as it did in March, according to the Baltic Exchange.
The ship shortage threatens to impact Asian economies that import oil and gas from the US, as they will find it hard to get spare cargoes at short notice if the weather turns cold this winter, said traders and shipowners.
Even petrochemical feedstock shipments are becoming more expensive to transport, further burdening buyers grappling with sluggish demand for chemicals as the pace of manufacturing slows.
There are very few LNG ships available for hire through the winter, and only for short voyages, said Flex LNG Management CEO Oystein Kalleklev. Owners, he said are demanding their vessels back so they'll be available when the Freeport LNG export plant resumes operations.
The Freeport facility in Texas is to restart in November after being hit by a fire in June that knocked out a significant portion of US LNG exports.
As companies book vessels for winter earlier than usual, energy majors are refusing to release LNG ships as they typically do at the end of summer.
Said Xeneta chief analyst Peter Sand: 'What we've seen in shipping this year has been remarkable as a result of the war in Ukraine.'
SeaNews Turkey