As America starts Exports:
http://www.hellenicshippingnews.com/vlcc-cargoes-from-the-us-a-new-market-development/
China moves to the Centre, the debt they hold is eye-watering!
Two questions:
Which are more dangerous to US national security Chinese aircraft carriers or VLCCs?
Why is congress not requiring that American oil be transported on American Ships?
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US is exporting close to 2 mill.bbls/day. Where are the US ships to carry it?
Probably, a good number of VLCCs are owned by Americans. Certainly, there are American companies with financial capacity to buy and reflag VLCCs.
It’s unfortunate that our short-sighted campaign contribution driven government cannot see the importance of American flag shipping.
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Where are the yards to build them? In six months to a year China could build 100’s.
Are there? Owning and operating VLCCs is a distinct skillset within the industry. Yes I have no doubt they can raise the cash, but what about the know-how? Apart from a few domestic routes there is very little in the knowledge base. The likes of Frontline, Teekay, Euronav, BP & Shell have been at it for decades, whilst the East grows exponentially. Look at the ships in contango off Fujairah…
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Yes there are many US owned and even operated VLCCs, but what is the incentive to reflagg to US flag if they are going to be forced to take large and complete US crew, do their dockings and repairs at expensive US yards and contend with incompetent and unprofessional USCG regulators.
YES, therein lays the real problem.
Institutionalised “lawful” corruption, money politics and a dysfunctional political system run by oligarchs.
And nobody appears to want to do anything about it?? Amazing!!!
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Spot on. Unfortunately the only people with the power to change things are the same people who created the problem and are growing fatter and more powerful from their corruption.
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There is no requirement that US ships do their dry dockings or repairs in the US. The USCG inspects American ships being repaired all over the world. If there were any significant increase in the number of US ships, qualified USCG inspectors would be hired.
A sensible and fair policy would be to require that 50 percent of US oil exports go out on American flag ships. Enforcement is simple. If in any month more than 50 percent of US oil is exported on foreign flag ships, a $1 per barrel export tax would be placed on US crude shipped on foreign ships. The cost of reflagging and operating under the American flag would be a lot cheaper then paying a $1 barrel export tax. It would not take long before there would be plenty of American flag ships.
There is nothing to stop experienced tanker owner/operators from reflagging ships US with an American subsidiary. Nothing to stop American owners from acquiring ships and whatever talent is necessary to operate them. Nothing to stop acquisition of an entire company, ships, managers, officers and crew. Nothing to prevent training American managers, officers and crew for the trade within a reasonable period of time.
Of course, there is no good reason to export any American oil. The US remains a huge net oil importer. Oil exports are already hammering the Jones Act fleet of tankers and ATBs. US exports mean fewer ships, jobs, and less technical, managerial, construction and repair capacity. The crude oil export ban should not have been lifted. It’s bad policy.
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If you are going to play the money policy game, why not do it more directly. Learn from Malaysia, they got years of practise of the money policy game. Funding politicians to buy attack adds and spread fake news is not as efficient as buying votes directly.
The next general election in Malaysia is only months away and the race is hotting up:
https://www.channelnewsasia.com/news/asiapacific/malaysia-to-distribute-us-1-6b-in-cash-handouts-to-7-million-9991386
Here is the way to do it:
Who can accuse us of buying votes when we give more to voters in opposition held states then in states that already vote for us???
The last election in Johor the Police changed all the voting boxes as the Gov was looking at a loss.
China working hard to get off reliance on oil as they know where that road leads to.
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To go back to a time of protection in international shipping is not only stupid, but impossible.
The history of shipping goes back millennials, with various degree of freedom and many attempts at nationalization, all without longevity.
The free market in shipping has existed for many decades and is the cornerstone of free trade in the world. USA has always been in the forefront of promoting free trade, freedom of navigation and free markets in shipping. In the years after WWII they have also been able to demand others to follow their lead. (Not always fairly and no longer possible)
For those who have the time and interest;
This article give a good historical background of the free shipping market:
www.springer.com/cda/content/document/cda.../9783642345975-c1.pdf?SGWID…
That boat has already sailed; the traders are being squeezed out. Market forces have taken over. To an outside this is an abject failure by Marad.
http://www.hellenicshippingnews.com/giant-oil-ships-from-the-u-s-to-cut-time-money-and-traders/
The US crude oil export is good for the VLCC market:
http://www.hellenicshippingnews.com/vlcc-cargoes-from-the-us-a-new-market-development/
Jon Fredriksen’s Frontline is buying more VLCCs to fill the demand:
https://worldmaritimenews.com/archives/213927/frontline-buys-two-vlcc-resales/
At least it keeps shuttle tankers busy, until US ports are able to handle VLCCs.
Just to confirm, from todays TW:
http://www.tradewindsnews.com/tankers/1445835/vlcc-newbuilding-orderbook-hits-100-ships
VLCC newbuilding orderbook hits 100 ships
Angelicoussis, China Cosco Shipping and China Merchants with the most large tankers on order.
March 5th, 2018 00:47 GMT
by Dale Wainwright
Published in Tankers
DSME’s recent spate of large crude tanker newbuildings has pushed the order backlog for VLCCs to 100 ships, latest data shows.
Last week the South Korean shipbuilder picked up a total of five VLCC newbuilding orders from two unnamed counterparties.
DSME secures orders for two more VLCCs
Read more .
DSME has the largest VLCC newbuilding orderbook with 22 ships under various stages of construction, according to Clarksons Research Services.
Hyundai Heavy Industries, the world’s largest shipbuilder, runs it a close second with a VLCC newbuilding order backlog of 20 ships.
However, the Hyundai Group as a whole has the most VLCCs on order if you include the eight ships on order at Hyundai Samho Heavy Industries.
Samsung Heavy Industries has just four VLCC newbuildings on order and all the for the same shipowner – Singapore’s BW Group.
Dalian Shipbuilding takes third place overall with orders for a total of 17 VLCC newbuilings, making it the largest Chinese builder of VLCCs.
A further 10 VLCCs are on order in China spread across yards such as Dalian Cosco, Jinhae Heavy Industries and Nantong Cosco Shipyard.
Japan’s yards are also represented with Japan Marine United’s (JMU) Ariake shipyard slated to deliver 10 VLCCs by 2020.
Compatriots Mitsu Shipbuilding and Namura Shipbuilding both have four VLCC newbuildings on order at their respective yards.
DSME seals triple VLCC newbuilding order
When it comes to owners with the most VLCCs on order it is a three way split between the old world and the new world of VLCC owners.
The Angelicoussis Group, China Cosco Shipping and China Merchants are all tied with nine ships each, according to the UK shipbroker’s figures.
Angelicousis has all nine ships on order at DSME while the two Chinese owners have their orders split between Dalian Shipbuilding as well as Dalian Cosco and Nantong Cosco.
Japan’s Kyoei Tanker is the next with five VLCCs on order with most other owners restricted to between two and four VLCCs on order.
However, the names of owners with ships on order reads like a who’s who of shipping with the likes of John Fredriken, N S Lemos and Olympic Shipping & Management.
The US oil boom is good for shipping: