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Lecture 13 - Tanker chartering

Welcome

This lecture examines tanker chartering, starting with the structure of the tanker market and the relationships between oil companies, tanker owners and shipbrokers. We discuss how the bargaining power of oil majors and vessel vetting requirements influence commercial opportunities, before following the chartering process from a cargo enquiry to a concluded fixture.

The second part introduces Worldscale and its use in tanker voyage calculations. Worked examples show how to convert Worldscale quotations into freight revenue, account for route alternatives and apply variable, fixed and canal differentials. We also discuss how war risk insurance affects voyage costs and the allocation of costs between owners and charterers.

What you’ll learn from this lecture

  • Tanker market structure, the role of oil majors and vessel vetting requirements
  • Chartering negotiations, firm offers, charter parties, subjects and commissions
  • Worldscale flat rates, negotiated freight rates and freight revenue calculations
  • Route alternatives, Worldscale differentials and war risk costs

Learning Outcomes

Skills
  • Can communicate with industry practitioners using tanker chartering terminology
  • Can apply economic reasoning and Worldscale calculations to assess tanker voyage alternatives
Competency
  • Can discuss tanker chartering decisions and voyage economics with others with a background in the field
Knowledge
  • Understands the economic mechanisms of the tanker market and how vetting requirements influence chartering decisions
  • Understands the chartering process and how Worldscale rates and differentials determine freight revenue

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