Freight rates for very large oil tankers have declined somewhat on a major route. Reuters reported on October 16 that the rate for shipments from the Persian Gulf to China decreased from the previous 841 to approximately 776 on a Worldscale basis. According to the report, the data comes from the Baltic Exchange.
Worldscale is a pricing scale for tanker freight. A value of 776 therefore does not mean 776 dollars per tonne or per vessel. Very Large Crude Carrier, or VLCC for short, refers to a very large crude oil tanker. (Source: Reuters via MarketScreener)
How expensive individual shipments remain is illustrated by another Reuters example: For a planned voyage of the Esteem Explorer from the USA to Japan in late November, a figure of 81 million dollars is cited. This value applies to this specific voyage and cannot simply be transferred to other vessels or routes. (Source: Reuters via AOL)
For shippers and freight forwarders in the energy sector, the overall rate therefore remains decisive. Base freight, insurance conditions, and potential surcharges must be considered together. Even a declining market indicator does not mean that a specific quote immediately becomes cheaper. Those purchasing oil products should separate price movements in transportation from changes in the actual commodity price. Only this way does it become clear which cost component actually drives up procurement expenses.