Conflict pushes oil tanker futures higher

Oil tanker futures prices in the April-June period rose by around 20pc on major global routes as Russia's invasion of Ukraine increased the likelihood of sanctions limiting available tonnage supply and altering oil trade flows.

Second quarter forward freight agreements (FFA) on the key Mideast Gulf to Asia-Pacific very large crude carrier (VLCC) route traded as high as Worldscale (WS) 46, up by 23pc from yesterday levels, according to a shipbroker. Gains in the route's spot market were similar, with rates increasing by 22pc to WS39 as shipowners capitalized on uncertainty generated by the conflict to pass rising bunkers costs along to charterers.

FFA rates on the US Gulf coast-Europe Aframax route climbed by 19pc to WS120.

The clean tanker FFA market also saw increases.

Prices for the second-quarter FFA contract for the Mideast Gulf-Asia long range (LR1) clean tanker route firmed by 10pc, according to a shipbroker, while Argus spot market rates on the route were flat at WS100.

As part of its response to Russia's invasion of Ukraine, the US placed restrictions on debt and equity financing for Russian state-owned shipowner Sovcomflot, which operates a fleet of 108 oil tankers.

The conflict had the opposite effect on dry bulk futures, which fell today, partially because of a number of conflict-related failed dry bulker bookings.

By Nicholas Watt