| NEW YORK
NEW YORK Dec 17 A Jones Act tanker was recently
chartered for six months at a record high rate of $110,000 per
day, market sources said, the latest sign of how surging U.S.
crude production is squeezing the niche market for U.S.-flagged
ExxonMobil Corp last week agreed to renew its
charter agreement for the 337,000-barrel Overseas Cascade at an
unprecedented $110,000 a day, nearly a 50 percent increase from
its previous rate for the same ship this summer, shipping
The century-old Jones Act requires all vessels operating
between U.S. ports to be U.S.-built, U.S.-owned and U.S.-crewed
in order to protect the U.S. commercial maritime industry.
ExxonMobil had been reletting the Overseas Cascade from
Brazilian state-run oil company Petrobras for over a year,
renewing at six-month intervals. The new rate will take effect
in January and last six months, with an option to extend for
another six months, market sources said. The rate does not
"It's difficult for me to agree that this is the new normal,
but I do believe that rates will go up," said one person
involved in the Jones Act market, who declined to be identified.
"We're on a trajectory, and you're going to see blips that cause
highs and blips that cause lows."
Rates for Jones Act tankers, previously used primarily to
ferry gasoline and diesel from Gulf Coast refiners to Florida or
the East Coast, have surged this year as traders redirected half
a dozen vessels to carry Eagle Ford crude from the port of
Corpus Christi to refiners up the coast in Texas and Louisiana.
There are fewer than 50 tankers currently moving crude oil
and refined products between U.S. ports. About a dozen trade
strictly between Alaskan production sites and refineries on the
Petrobras has the Overseas Cascade, built in 2009, on a
five-year charter from shipowner OSG Ship Management Inc, which
is currently in Chapter 11 bankruptcy.
For the past six months, the Overseas Cascade has carried
gasoline and refined products from Port Arthur, Texas, to Port
Everglades in Florida, according to shiptracking data from
Reuters Eikon. Shipping sources said it is expected to continue
In June, a similarly sized tanker went for the previous
record of $100,000 per day when the American Phoenix was relet
by ExxonMobil from Koch Shipping and Supply.