The Northwest Passage is a sea route through the Arctic Ocean, along the northern coast of North America via waterways through the Canadian Arctic Archipelago, connecting the Atlantic and Pacific Oceans.
[May 9 2010 Sitting Ducks for pirates: idling tankers]
At least 15 VLCC crude carriers are idling in the Persian Gulf, Gulf of Oman and Gulf of Suez. The tankers can store a combined 30 million barrels of oil.
Traders store oil hoping to benefit from a so-called contango structure in futures markets, in which prompt prices are lower than contracts for later delivery. Traders can make money when the difference in prices is greater than the cost to charter the ship.
The contango between the front-month crude contract traded on the New York Mercantile Exchange and the second-month contract to the highest level since Dec. 15. Dirty products usually include crude oil and may include fuel oil.
The VLCC rate was $43,876 a day as of April 23, according to the London-based Baltic Exchange. The rate has more than doubled this year. VLCCs can carry about 2 million barrels of oil.
Iran, OPEC’s second-biggest oil producer, added three supertankers to its fleet of vessels storing crude, matching a similar program in 2008 that helped freight rates to triple, ship tracking data show.
Two years ago, Iran used as many as 15 tankers for storage, constricting vessel supply and helping to more than triple freight rates in less than three months.
Iran is likely storing oil because of weakening demand as refineries across Asia, accounting for almost two-thirds of global demand for supertankers, carry out maintenance. National Iranian Tanker Co., which operates the supertankers, also has a laden suezmax tanker idling off Iran, ship-tracking data show. A suezmax can hold about 1 million barrels of oil.