According to reports, the Louisiana Offshore Oil Port appeared to be preparing to load another VLCC on October 30.
VLCC arrives at LOOP
On October 19, the VLCC ‘Xin Wei Yang’ arrived at LOOP laden with just shy of 700,000 barrels of 29.4 API Basrah Light.
The Valero was the consignee for the crude and Iraq’s SOMO was the shipper. Before arriving at LOOP, the Xin Wei Yang spent three weeks in the Offshore Galveston Lightering Zone. The tanker was built in 2017 and has not been seen in the region prior to this.
The Xin Wei Yang also was fixed by China’s Unipec to ship a cargo of crude from the US Gulf Coast to Singapore or China, according to a Platts fixtures report. The report said the vessel was expected to load on October 30.
Chinese buyers have been out of the market for buying US crude recently and halted all US crude exports from Louisiana in August and September. Higher VLCC freight rates, a narrower Dubai/LOOP Sour spread and uncertainty over possible trade tariffs imposed by China on US crude have all made it difficult for China to buy US crude.
Other countries step in
However, other buyers have stepped in. Six VLCCs were fixed out of the US Gulf Coast for loading in the third decade of October, according to Platts shipping information. Those cargoes were fixed to ship oil to China, Singapore, Japan and South Korea. Charterers, in addition to Unipec, include Occidental Petroleum, JX Nippon and Lord Energy. Those companies were able to secure the vessels with freight rates between lump sum $4.6 million and $6.2 million. That is a relative bargain when compared with current freight rates for VLCCs to Asia, which have spiked to more than $8 million.
LOOP has regularly loaded VLCCs for the export of US crude since the beginning of this year. The deep water offshore facility is the only port in the US that is currently able to directly load a VLCC to its maximum capacity of about 2 million barrels. VLCCs at other ports in the Gulf Coast must be loaded with the assistance of ship-to-ship transfers.
In addition to offering sour crude grades for export at LOOP, the facility also recently added the ability to export WTI Midland. In September, LOOP allocated one of its eight underground crude oil storage caverns to WTI.
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