Leasing an oil tanker is getting expensive. According to a report by Reuters, ExxonMobil (NYSE:XOM) is paying an estimated $100,000 daily for use of the American Phoenix, an oil tanker that can carry over 330,000 barrels between U.S. ports. Because similar vessels are hard to find on today’s market, Exxon is paying a premium over the latest quotes for ships the size of the American Phoenix.
Industry sources reported the six-figure daily lease of the American Phoenix to Reuters. Koch Shipping and Supply Co. owns the rights to the tanker, which was said to be struggling to find lessees for the past several months. All told, there are less than 40 oil tankers capable of this workload on the market, and all are subject to the Jones Act. Increased production rates are creating a higher demand for high-volume tankers, apparently at any price.
The Jones Act of 1920, which makes it obligatory for tankers operating in U.S. ports to be built and owned by U.S. companies (and operated by U.S. crews), makes it difficult for oil conglomerates to find tankers on short notice. The Koch company is said to have inked a two-year deal with ExxonMobil for the American Phoenix.The last quoted prices for the American Phoenix were $75,000 a day, a figure that was considered high by industry analysts. The surge in production at Eagle Ford in Texas has increased traffic dramatically between the Lone Star State and Gulf refineries. The American Phoenix has been used for both crude and refined product within the last year, giving ExxonMobil the option to make its plans accordingly.
The high-traffic area at the moment is between Corpus Christi and Houston, and sometimes as far as Louisiana. The American Phoenix has been operating between Florida and Louisiana, and was in Miami’s port at the time of writing. Neither Koch representatives nor ExxonMobil officials commented on the details of the lease.
Don’t Miss: Here’s Why BP Wants Your Sympathy.