Unipec fixes VLCC of Urals to East as Brent-Dubai slides: traders

Unipec has fully fixed the British Vantage VLCC to take a crude cargo from Skaw in the North Sea to Ningbo in China, shipping sources and traders said Wednesday, with traders indicating the shipment is expected to be made up of Aframax cargoes from the Baltic Sea Urals program.

According to shipping sources, the 270,000 mt cargo has a laycan for September 10-13 and was fixed at a $5.75 million lump sum.

“The ship is fully fixed to carry Urals East for Unipec I believe,” a charterer active in the North Sea said.

Trading sources said the volume is expected to consist of several smaller cargoes from the Urals-loading ports of Primorsk and Ust-Luga in the Baltic Sea, marking the first VLCC shipment of Urals east from the Baltic Sea in several months.

“They have [several] cargoes of Urals in the first 10 days of the September loading program,” a crude trader said.

Unipec is a regular buyer of Urals crude out of both the Baltic and Black Seas, and have been seen to send crude East from both locations, but market sources said it has been some time since a VLCC of Urals has been assembled at the ship-to-ship transfer area at Skaw to move to Asia.

The falling premium of Brent crude futures over Dubai crude swaps in the past few weeks has encouraged Asian refiners to buy more crudes priced against Dated Brent for September and October loading, market sources said.

The front-month Brent/Dubai Exchange of Futures for Swaps (EFS) — which enables holders of ICE Brent futures to exchange their Brent futures position for a forward month Dubai crude swap — has been hovering around $1.07/b and $1.13/b over the past week, compared to a month ago when it was ranging between $2.50 and $2.60/b.

The EFS spread has been narrowing steadily as the ICE Brent futures contract has dropped to year lows, reflecting a weak physical market in the North Sea.

A representative from Unipec declined to comment.
Source: Platts