The most useful thing for an oil-tanker captain heading to Houston right now might be a fishing rod.
That’s because they’re going to have to wait an average of four days, or eight times longer than usual, to unload as Houston’s storage tanks fill with record amounts of U.S. oil extracted from shale. U.S. ports and waterways are grappling with the highest crude stockpiles and fuel exports in decades.
“There’s a lot more oil on the water,” Erik Broekhuizen, the head of tanker research at Poten & Partners, a shipbroker that specializes in energy, said by phone June 16 from New York. “There are some inefficiencies in the system where ships are left waiting to discharge.”
The winners are shipowners, as the delays tie up vessels and helped rates for Aframax tankers about double in a month, according to data from Clarkson Plc, the biggest shipbroker. That’s a relief after years of losses caused by too many new vessels being ordered just before the global financial crisis.
In normal times, Aframaxes would only need to wait about 12 hours to unload at Gulf of Mexico ports, said George Los, a senior analyst at shipbroker Charles R. Weber Co. in Greenwich, Connecticut. The 800-foot-long tankers ferry about 500,000 barrels of oil between South America and the U.S.
Charter Costs
Daily rates for the vessels were last priced at $61,134 by Clarkson, having rallied from $29,260 in mid-May. The vessels need about $13,000 to break even and average annual rates were below that level in three of the past four years.
Charter costs will average $28,750 this year, according to the median forecast of 11 shipping analysts compiled by Bloomberg. That’s 22 percent more than last year and 13 percent higher than forecast in January.
Houston, the U.S.’s biggest refining center, and the surrounding district has a near-record 235 million barrels of crude stored, the most for the time of year in Energy Department data that begin in 1990. Inventories have grown so large that storage companies must first make space before foreign crude can be unloaded, according to Charles R. Weber.
The jams on the Gulf coast are a boost for companies such as Hamilton, Bermuda-based Teekay Tankers Ltd., the largest publicly-traded owner of Aframaxes. Shares of the company jumped 44 percent this year. Calls and e-mails to Teekay seeking comment weren’t answered. The biggest owner of the carriers is Russia’s state-owned OAO Sovcomflot.
Tanker Fleet
The queues in Houston are diminishing the tanker supply glut that drove rates as low as $675 in 2011. Owners have been more restrained since then and the fleet expanded just 1 percent, according to Nigel Prentis, head of research at Hartland Shipping Ltd. in London.
Similar gains in rates are happening across the tanker fleet thanks to a surge in supply from the Organization of Petroleum Exporting Countries. The 12-nation group has pumped more than its self-imposed limit of 30 million barrels a day for a year, preferring to defend market share rather than prices.
The Baltic Dirty Tanker Index, a measure of returns for hauling crude oil, advanced to an 18-month high of 1,046 points this year, Baltic Exchange data show. Daily rates for very large crude carriers, the biggest tankers, averaged $63,000 in 2015, the most since at least 2009.
“The world is overflowing with oil,” said Eirik Haavaldsen, a shipping analyst at Pareto Securities SA in Oslo. “The Aframax fleet is being impacted by more and more frictions and inefficiencies where fleet growth has been negative while demand is moving steadily upwards.”