Vancouver Aframax rates climb to 2-month highs

Aframax rates for Canadian crude oil exports from Vancouver rose to two-month highs last week after more direct shipments to Asia-Pacific and four fuel-oil cargoes exported from California cleared out tonnage.

The Vancouver-US west coast Aframax rate rose on 20 September to Worldscale (WS) 155, or $2.03/bl for Cold Lake crude, the highest since 18 July, according to Argus data, after Shell provisionally booked a vessel at that level for a shipment to the Pacific Area Lightering zone (PAL) loading in early October.

Similarly, the Aframax rate for a direct shipment from Vancouver to China on 20 September was $3mn lumpsum, or $5.49/bl for Cold Lake, the highest since 25 July, according to Argus data.

Since 20 August, 10 Aframaxes have hauled crude from Vancouver to destinations in Asia-Pacific, including China, Japan, South Korea and Brunei, with one more such export possible by the end of September, ship tracking data from Vortexa show, compared with just nine in May-July.

The rise in direct Vancouver-Asia shipments has coincided with four rare fuel oil cargoes exported on Aframaxes from Chevron's 245,000 b/d Richmond, California, refinery to destinations across the Pacific. Those exports came after a possible unplanned shutdown at one of the refinery's secondary units, traders said.

One of those Aframaxes, the Shell-operated Pacific Ruby, carried Vancouver crude to the US west coast three times since the Trans Mountain Expansion (TMX) came online in May. Aframaxes in the "dirty" tanker fleet can load crude oil or fuel oil cargoes.

Direct transpacific shipments remove vessels from the west coast North America market for about 45 days.

Muted activity at PAL

With more crude going directly to east Asia, no ship-to-ship transfers of Vancouver oil onto very large crude carriers (VLCCs) have occurred since 25 August, Vortexa data show, likely due to a rise in VLCC rates. The rate for a VLCC voyage from the US west coast to China was $3.35mn lumpsum on 20 September, a rate last reached on 20 August and prior to that in May.

All-in, the cost to reverse lighter three 550,000 bl shipments of Cold Lake crude from Vancouver onto a VLCC at PAL, then ship to China, was $8.38mn, or $5.11/bl, on 20 September, including $150,000 ship-to-ship transfer costs at PAL, 15 days of VLCC demurrage and three days of Aframax demurrage for each reverse lightering.

By Tray Swanson