<\/p>\n
The vessel, laden with 2 million barrels of crude, became the first in almost two years to make the voyage from Saudi Arabia to northwest Europe via South Africa\u2019s Cape of Good\u00a0Hope\u00a0\u2014 a journey that takes almost twice the time as the usual route through the Suez Canal. Now at least two more supertankers are doing the same.<\/p>\n
<\/p>\n
As the coronavirus pandemic turns the oil market on its head, it\u2019s also sending shockwaves through the shipping industry. From California<\/a> to Gibraltar, tankers have piled up as suppliers deal with the largest glut the world has ever seen and ports have become congested. With storage options running out, fuel at historically low<\/a> prices and the value of cargoes almost certain to rise in the future, some ships are taking rare voyages, often prolonging their routes until more favorable conditions arise.<\/p>\n <\/p>\n \u201cEveryone is seeking to postpone the delivery of cargoes,\u201d as storage fills up said Peter Sand, chief shipping analyst at industry group BIMCO. \u201cRight now, in combination with very low fuel prices, it does make sense to bring ships around the Cape of Good\u00a0Hope.\u201d<\/p>\n <\/p>\n Two weeks after the New Vigorous<\/em> set sail for France, another supertanker, the New Harmony<\/em>, embarked on the same route around Africa, vessel-tracking data compiled by Bloomberg show. Two weeks after that, a third ship, the New Pioneer<\/em>, did the same.<\/p>\n <\/p>\n There are other sporadic instances of long-distance voyages. Oil tankers from Europe don\u2019t normally sail around the tip of South America, but last month the Psara I<\/em> did so on its way to delivering the first Norwegian crude to the U.S. West Coast in 11 years.<\/p>\n <\/p>\n The Trident Liberty<\/em> is the first-ever supertanker to load Kurdish crude at Ceyhan on Turkey\u2019s Mediterranean coast and haul it, probably to China, around the coast of Africa. Cargoes to China normally move on smaller ships through the Suez Canal.<\/p>\n <\/p>\n The precise motives of the moves aren\u2019t known, but there are some well-known issues in the oil market that support slower deliveries. In Europe alone, the amount of crude in floating storage is now at a record 28.9 million barrels, according to ship-tracking firm Vortexa Ltd. At the same time, traders are grappling with a market condition known as contango, where near-term prices are lower than those further out.<\/p>\n <\/p>\n \u201cThings have changed since the oil glut and wide contango<\/a> started to dominate the markets,\u201d said Burak Cetinok, head of research at Arrow Shipbroking Group in London.<\/p>\n <\/p>\n Tankers used to speed up when laden with cargo and slow down when they were empty to save money on fuel charges, he said. Now, he\u2019s seeing the opposite. \u201cThey\u2019ve started slowing down when laden because there\u2019s a very limited<\/a> space to discharge, and wide contango makes the cargo more valuable at a later date.\u201d<\/p>\n <\/p>\n Perhaps nowhere is the effect of the market upheaval more obvious than in the voyage around the Cape of Good\u00a0Hope. In addition to the three crude-laden vessels that have sailed the route in recent weeks, the oil-product tanker BW Triton<\/em> has also gone around South Africa from an East-of-Suez origin, tanker-tracking shows. At least two others were initially bound for Europe but instead diverted to West Africa.<\/p>\n <\/p>\n \u201cThis is a tight market\u201d for ships hauling oil products, said Lars Dencker Nielsen, commercial director of Scorpio Tankers Inc., on an\u00a0earnings call<\/a>\u00a0Wednesday. The lack of vessels is enhanced by storage as well as congestion and operational constraints, and it\u2019s \u201ccausing vessels to take longer routes, for example, vessels sailing around the Cape of Good\u00a0Hope\u00a0instead of transiting to Suez Canal.\u201d<\/p>\n <\/p>\n That\u2019s a significant increase in voyage distance and time, which limits tonnage supply, he added.<\/p>\n <\/p>\n Supertankers are too big to pass through the Suez Canal with a full cargo, so they generally discharge at a pipeline terminal near the Red Sea end of the waterway and re-load once they reach the Mediterranean. For a voyage from the Persian Gulf to northwest Europe, the journey usually takes a little more than three weeks.<\/p>\n <\/p>\n