The freight rate premium demanded by Aframax shipowners to load crude oil cargoes at Libyan ports has almost disappeared, shipping sources have told Platts.

After the Greek-owned Araevo tanker was bombed near the port of Derna in early January, there was a huge reluctance among shipowners to lift cargoes from Libyan ports.

This trepidation was entrenched after National Oil Corporation [NOC] was forced to decare a force majeure on 11 of its oil fields in Central Libya following attacks by the Islamic State.

As a result of the strife, there were often only three major shipowners that were prepared to load crude at Libya in the past three months.

Due to the extremely restricted supply of ships available for Libya loadings, and the inherent risks presented to the shipowners that took on this business, a substantial freight rate premium was demanded versus other Mediterranean voyages.

Typically in recent weeks a Libya-Mediterranean Aframax run would pay a shipowner about Worldscale 20 more than more common voyages, such as Ceyhan-Med.

As more and more cargoes have started to become available for export at the ports of Marsa el-Hariga, Marsa el-Brega, Zueitina and Mellitah, an increasing number of shipowners have cautiously re-entered the Libyan market.

This is partly due to the impending end of the ice season in the Baltic Sea, which could cause lower freight rates in the Baltic Sea and incentivise owners to look to the Med.

“There are some owners calling at Libya now that hadn’t been touching those cargoes with a bargepole a few weeks ago. We are close to the end of the winter ice season though and it is a free for all, you have to fix what you can get,” said a shipowner.

Increased confidence

Shipowners have shown signs of increased confidence in the Libyan oil sector, as a growing number of cargoes have been lifted without any disruption.

“We are not in Libya at the moment but we would do it. We have a contract with one of the regular Libyan lifters and if other shipowners go there [without any problems] we will too,” said a shipowner.

Sources also said that the fact that most of the chaos in Libya has taken place at oil fields rather than ports had provided assurance to owners that liftings could be safely undertaken.

“The disruption in Libya recently has been to production rather than the ports. As long as there is oil in the ports everything will run smoothly from the shipping side,” said a charterer.

In the week ended March 22, the Maratha, Ioannis and Monterey Aframaxes all loaded 600,000 barrel crude cargoes for export at Brega, Hariga and Zueitina respectively.

The Neverland also loaded a 600,000 barrel cargo at Zawiya, but just sailed down the coast to Mellitah and offloaded the cargo there as part of one of NOC’s system movements.