Day rates for oil tankers have surged past the $100,000 mark for the first time in seven years thanks to strong demand from China.
According to Bloomberg, tankers carrying 2 million barrels of Saudi Arabian crude to Japan were earning $104,256 per day as of last Friday, a 13 percent jump from the day before and the highest level since July 2008.
Seaport Global Securities analyst Charles Rupinski told Bloomberg that last week’s booking surge is tied to growing demand for shipments from West Africa to China set for loading either later this month or in early November.
The long journey from West Africa to Asia is a boon to tank owners.
Cargo requires about 33 days to travel to make the journey, about one and half times longer than its takes to transport crude from the Middle East to Asia, Bloomberg noted.
“There’s been quite an active West Africa market,” head of Hartland Shipping Services Nigel Prentis told the news outlet.
China is the world’s second largest consumer of oil and became the largest net importer of oil in the world in 2014.
Annual oil consumption growth in China has cooled after a hitting a high of 11 percent in 2010 as the country looks to reduce capacity overbuilding and contends with shaky global markets, according to the U.S. Energy Information Administration.
However, Chinese oil consumption still clocked in at an estimated 10.7 million bbl/d of oil in 2014, up 4 percent from 2013.
Chinese crude imports have grown 5.6 percent since last year and hit 26.6 million metric tons in August, Bloomberg noted.
The EIA projects that China will account for more than one fourth of global oil consumption growth in 2015.