chapter two - OAPEC

decrease occurred in US market, where gasoil prices were 44.6% lower than
in 2008, as the average annual price rose to $67.2/b. The Rotterdam market
came next with a decrease of 44.3%, bringing the average price to $69.8/b,
then in Singapore the gasoil prices fell by 42.9%, giving an average price of
$70.6/b, and finally on the Mediterranean where it fell by 38.6% to $76.9/b.
3-2-3 Fuel Oil Prices
Fuel oil prices chopped down in 2009 on all markets. On the US
market the average price fell by 22.5% to $57.6/b, on the Singapore market
it declined by about 25% to $57/b, on Mediterranean the average price of
fuel oil fell 28% below 2008 to $55.8/b, while price on the Rotterdam
market averaged $54.7/b, which was 30.7%, lower than in 2008.
3-3 Oil Freight Rates
Crude oil freight rates on all routes witnessed a sharp decline by over
60% in 2009 compared with their 2008 levels for several reasons, on top of
that was the global financial crisis. The financial crisis resulted in economic
recession and a drop in oil demand which in turn led to a decline in global
oil trade and subsequently a drop in the demand for all tankers.
The average rate for oil shipments from Arabian Gulf ports to the East
on VLCCs (230,000-280,000 dwt) was 41 points on the World Scale (WS) 1 .
This was 95 points, or 70%, lower than in 2008.
Freight rates for shipments from Arabian Gulf ports to the West, on
crude carriers with a capacity of 270,000-285,000 dwt, averaged 30 points
on the WS, which was 69 points, or about 69.7%, lower than in 2008, as
shown in Table (1-14).
In the Mediterranean region there was a similar decline in freight rates
for small and medium-sized tankers (80,000-85,000 dwt). The average
freight rate in 2009 was 80 WS points, which was 125 points, or about 61%,
lower than in 2008.
In January 2009 crude oil freight rates on the Arabian Gulf ports to
East and West routes registered the highest level, to Average 58 and 41 WS
points respectively. Then freight rates started to fall to reach their lowest
level in April and May, after that they fluctuated up and down in the second
half of 2009. In cross the Mediterranean route freight rates started with 106
WS points and then they began to fall till reached their lowest level of 62
WS points in April. Freight rates cross the Mediterranean route then
changed course to reach their highest level of 111 WS points in June 2009.
(1) World Scale is a method for calculating freight prices. One point on the WS means 1% of the standard price
for freight that direction in the WS boo, which is published annually by the world scale association. It contains a list
of prices in the form of dollars per ton, called “World Scale 100” for all the major routes in the world.