A Dallas oil trader is buying $2bn worth of supertankers to transport oil from Iraq to refineries in India and China, as the Trump administration struggles to ease a global diesel shortage. Ben Morrow, chief executive of Dallas-based PIF Energy, is assembling a fleet of up to 15 older ships, each capable of carrying up to 2mn barrels of oil, to load cargoes in Iraq’s southern port of Basra and transit the Strait of Hormuz. The rush to secure ships follows the war with Iran, which has created a growing shortage of tankers willing to navigate the strategic waterway, choking the flow of crude from the world’s most important oil-producing region. Traders historically charter vessels rather than own them outright, making Morrow’s $2bn bet an extraordinary step underscoring the desperation to secure scarce shipping capacity.
Morrow said the tanker fleet would help get oil from Iraq’s state-owned oil agency and Saudi Aramco to refiners in India, China, Indonesia, and Europe. The US oil industry has urged the administration to pressure China to expand diesel exports to help ease the global shortage. President Donald Trump raised the matter with Xi Jinping during his visit to Washington last month.
Tanker values have surged, with second-hand Very Large Crude Carriers now costing more than new builds due to high demand. The average price of a 15-year-old VLCC reached $160mn, up 44% over the past three months, while daily freight rates for supertankers hit $1.3mn. Captains are being paid up to $100,000 per month to navigate the region.
Source: Financial Times Companies · Summarized by HeadlinesBriefing