Glencore Charters Maersk VLCC to Ship Forties Crude to South Korea

LONDON (Dow Jones)–Glencore International PLC (GLEN.LN) will ship 2 million barrels of North Sea Forties crude to South Korea, bringing the total volume of the grade leaving Europe this month to over 5 million barrels, according to shipping fixtures seen by Dow Jones Newswires Monday.

ST Shipping, Glencore‘s shipping unit, has chartered the Very Large Crude Carrier, or VLCC, Maersk Nectar to ship Forties crude from Hound Point in the U.K. to South Korea, the fixtures showed. Loading is scheduled for May 30-31 and the cost of shipping is $6.25 million, according to the fixtures.

The price of Forties, the main component of benchmark Brent, has been weak in recent weeks due to low seasonal demand from refiners and ample alternative supplies.

But arbitrage to Asia and a planned shipping of the grade to South America have provided support to prices.

In Friday’s price-setting late-afternoon trade a cargo was sold at parity to physical benchmark Brent, while two bids above the marker found no sellers.

Norwegian oil and gas major Statoil ASA (STO) had earlier chartered two 2-million-barrel supertankers to ship North Sea grades–including Forties–to South Korea and Singapore in May, according to shipbrokers and crude traders. Also, shipping company Scanports chartered a supertanker to ship Forties to South Korea.

A European Union-South Korean free trade agreement lets Korean refiners save 3% in import duties of North Sea oil grades.

Elsewhere, BP PLC (BP) is looking to ship almost 1 million barrels of Forties crude to Chile this month.

As a result, over 44% of Forties crude originally scheduled for loading in May are set to leave Europe.

-By Konstantin Rozhnov, Dow Jones Newswires