Oil at Libyan Ports May Run Low on Disrupted Production, OSG, Teekay Say

Crude supplies for loading at Libyan ports may start to run low because of disrupted production at oil fields caused by an uprising against leader Muammar Qaddafi, two ship owners said.

While six owners of tankers carrying crude, refined oil products and liquefied natural gas reported successful loadings during the past week, at least seven oil companies’ production was disrupted. Ras Lanuf, Libya’s largest refinery, had its oil supply interrupted, two company officials said yesterday.

“They might be the last cargoes out of the ports because the flow of oil has stopped,” Bruce Chan of Teekay Tanker Services said by phone today. “It may have been oil that arrived at the port in the tanks prior to the disruption,” said the president of the business unit of Teekay Corp., two of whose tankers loaded in Libya in the past week.

Crude oil traded in New York jumped almost 14 percent last week as traders speculated that Libyan supply, the third- largest in Africa, is being disrupted and that regional unrest is spreading. Riots from Morocco to Bahrain have already toppled leaders in Tunisia and Egypt and there are protests in Yemen, to the south of Saudi Arabia, the world’s biggest oil producer.

As much as 1 million barrels of Libya’s daily oil output may have been shut, Barclays Capitalsaid in a Feb. 23 report. The country produced 1.65 million barrels a day in 2009 or about 2 percent of the global total, according to data from BP Plc.

Crude Transportation

“It’s slowing down, and we foresee it slowing down more and more to more or less come to a halt,” Mats Berglund, head of the crude transportation strategic business unit at Overseas Shipholding Group, said on a conference call yesterday. The New York-based company, the largest U.S.-based oil tanker owner, doesn’t have ships in Libya, he said.

Shipping lines including Thenamaris Ships Management Ltd., Torm A/S and Polembros Shipping Ltd. said they successfully loaded energy cargoes in the past week. Ports are mostly operating and oil cargoes still leaving, Clarkson Plc, the world’s biggest shipbroker, said yesterday. Some disruptions were caused by bad weather or because Libyan authorities couldn’t be contacted, Clarkson said.

The disruption has boosted the cost of hiring tankers because alternative supplies from West Africa or Saudi Arabia are being shipped over longer distances, Teekay’s Chan said.

Tanker rates for shipping 600,000-barrel cargoes of crude across the Mediterranean advanced 65 percent last week to 155.63 industry standard Worldscale points. That equates to daily earnings of $31,256.

Worldscale points are a percentage of a nominal rate, or flat rate, for more than 320,000 specific routes. Flat rates for every voyage, quoted in U.S. dollars a ton, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.

(Source: http://www.bloomberg.com/news/2011-03-01/oil-for-export-from-libya-may-run-low-on-output-disruptions-shippers-say.html)