$680,000 per day in ship’s fuel costs… ouch. ***UPDATE***

Correction to this article… 

Ship brokers MJLF & Associates pointed out to us this morning that VLCCs burn ~100MT of fuel per day, which results in a daily fuel cost of $68,000, vice the $680,000 as stated by NYK below…

TOKYO (Dow Jones)–Expensive bunker oil and low shipping fees for oil tankers are a financial threat for shipping companies, and some may have to get rid of their older Very Large Crude Carriers if ship fuel prices remain high, a senior Japanese shipping company official said Wednesday.

“Bunker oil prices have been quoted around $680 a metric ton recently. This translates $680,000 a day for fuel costs for a big VLCC. You make losses at this price everyday you operate a VLCC,” said Kenichi Miki, Corporate Officer of NYK Line’s (9101.TO) Petroleum, Chemical and LPG Group.

Options for shipping companies include shifting to new VLCCs that travel further on the same amount of fuel, or “you may want to keep some of your VLCCs idle for a while, or get rid of them by selling out or scrapping,” he told Dow Jones Newswires.

NYK Line owns 36 VLCCs, and it put one of them up for sale late last month, he said. Oil and liquefied natural gas tankers represent 14% of its total fleet, of 827 vessels.

“We may sell a few more VLCCs among those reaching 15 years of age next year, depending on the (VLCC) market situation,” Miki said.

NYK Line, one of the three top energy shipping companies in terms both of tonnage and tanker numbers, Friday sharply revised down its group net profit outlook for the fiscal year started in April 2011 to Y5 billion from a previously forecast Y34 billion. It blamed this in part on higher fuel costs and a strong yen–many of its contracts are payable in US dollars.

Another major Japanese shipping company, Mitsui OSK Lines Ltd. (9104.TO), on the same day slashed its group net profit forecast to Y1 billion from Y10 billion, for similar reasons.

The shipping rate for a 260,000-ton VLCC from the Middle East to Japan dropped to a six-month low of Worldscale 47.74 Monday. The cash cost, or how much an owner can make based on freight rates and fuel costs, was assessed by London’s Baltic Exchange at minus $1,037 a day, close to its record low.

The reason for low rates is excess supply of VLCCs in the global market, said Miki. There are between 540 and 550 VLCCs worldwide, and 140 to 150 more ordered before the 2008 financial crisis are likely to take to the water from next year.

Bunker oil prices are unlikely to fall significantly anytime soon, given a global move by refiners to install secondary units to crack heavy distillates into more sellable, lighter products, Miki said.

-By Mari Iwata, Dow Jones Newswires