Oil shipping rate soars 28% overnight after US sanction on COSCO

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Oil shipping rate soars 28% overnight after US sanction on COSCO

Oil freight rate from Asia to Middle East torrented more than 28 per cent overnight on Friday, the 27th of September 2019, after global oil freight market was overwhelmed by a US decision to put sanction on Chinese oil freight service provider COSCO for allegedly funnelling crude oil out of Iran amid a US sanction what analysts were contemplating as a latest escalation of an already steamed up full-fledged trade war between Washington and Beijing.

On top of that, according to US State Department’s Friday’s (September 27th) announcement that led to an upsurge of oil freight price by as much as 28 per cent, the US State Department had dubbed the latest sanction as one of the largest actions the Trump Administration had taken since its re-imposition of sanctions on Iranian oil on last November, while two COSCO units alongside other companies were hit with latest US sanction for alleged involvement in shipping Iranian crude despite a US sanction.

In point of fact, the latest sanction on Chinese oil carrier, COSCO, which used to operate more than 50 oil supertankers across the globe, was widely considered as a US move to ratchet up pressure on Iran to drop off its nuclear and ballistic missile programs amid rising tension between US and Iran over a breach of a 2015 nuclear treaty, which US President Donald Trump had broken off last year saying Iran was enhancing its nuclear ores and heavy water reserve to ramp up regional influence.

Meanwhile, supertankers’ rate on Middle East to China, the world’s largest crude oil consumer, spiked to its eleven-month peak on Friday (September 27th) to $51,480, Baltic Exchange data had revealed on Friday’s (September 27th) market closure.