Phillips 66 To Ship Record $14 Million US Crude To South Korea

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According to a Reuters report, Phillips 66 tentatively chartered a supertanker to ship U.S. crude from the U.S. Gulf Coast to South Korea for a record $14 million this week, sources said Thursday, as tanker rates continued to soar after U.S. sanctions on units of Chinese giant COSCO.

What is it?

Phillips 66 provisionally chartered the Very Large Crude Carrier (VLCC) Olympic Laurel for $14 million and is expected to load in mid-November, according to Refinitiv Eikon data.

The company did not immediately respond to a request for comment.

Why is it important?

The United States in late September imposed sanctions on two units of China’s COSCO, which operates more than 50 supertankers, alleging the units violated U.S. sanctions on Iran. Freight rates for supertankers across the globe to ship oil, particularly to Asia, have surged as a result.

Last week Phillips 66 provisionally chartered the VLCC Syfnos to ship U.S. crude to China, two sources said. The company had also chartered the Landbridge Glory to ship U.S. crude to South Korea in early November for $10.4 million, according to a source and Refinitiv shipping data.

Previous Failure

The Syfnos fixture has since failed, two sources familiar with the matter said.

It was not immediately clear whether the Landbridge Glory had failed but it was no longer reported as a fixture on Refinitiv Eikon’s database.

US Crude Export Surge

U.S. crude exports have surged since a decades-long ban was lifted in late 2015. The exports rose to an average 2.9 million barrels per day (bpd) in the first half of 2019, according to the U.S. Energy Information Administration.

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Source: Reuters

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