BUSINESS

US-Iran tension to shift VLCC traffic elsewhere

TAGS: Shipping

VesselsValue has published its assessment of the likely impact of an escalation in the standoff between the United States and Iran on the tanker market, particularly very large crude carriers (VLCCs), a market where Greek shipowners control 23.8 percent of the global fleet by ship number, according to the shipping vessel database service.

In a report published on Thursday and penned by trade analyst Court Smith, VesselsValue estimates that “Red Sea loadings would increase almost immediately as Saudi Arabia would maximize the export volumes they could send through their port facilities. US crude exports which continue to debottleneck would surge upwards as pricing differentials would encourage more exports, and more West African barrels would be brought online. A likely outcome would be an immediate relaxation on the Venezuelan sanctions, which have a more discretionary basis for their implementation, so the Aframax trade in the Caribbean could see a surprise resurgence.”

It goes on to warn that “armed guards are also a possibility, which introduces an additional cost and escalates overall risk.”

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