Sept. 15 (Bloomberg) – The volume of tankers idled by owners is at the highest since early 2003 because of ample oil stocks, a “still weak” demand recovery and rising numbers of ships for hire, according to Drewry Shipping Consultants Ltd.

Tankers with carrying capacity of 700,000 deadweight tons were idled last month, up from zero in April, Singapore- based consultant Parul Bhambri said in Drewry’s monthly Tanker Insight report, released today. The fleet’s total capacity is 368.5 million deadweight tons, estimates in the report show.

“There seems to be no source of relief in the gloom that tanker owners have been facing since the start of the second quarter,” Bhambri said. “While some are bidding farewell to their older units by selling them in the demolition market, other, more confident owners are accessing the option of putting their units into lay-up.”

The cost of shipping Middle East oil to Asia, the world’s busiest route for supertankers, has dropped below owners’ operating costs as the worsening world economy cut oil demand. The Organization of Petroleum Exporting Countries produced 13 percent less oil in August than a year earlier. Rental income on the benchmark Saudi Arabia-to-Japan route has collapsed 74 percent in the past 12 months to 30.77 Worldscale points, according to the Baltic Exchange.

Daily Costs

That equals a return of $2,342 a day, compared with $11,603 in daily operating costs for very large crude carriers, or VLCCs, capable of carrying 200,000 deadweight tons or more of cargo, according to estimates from London-based Drewry.

Laying-up, or idling, ships cuts running costs. It’s not a “straightforward” decision because it involves an initial charge and concerns about where and how long a tanker will be mothballed, Bhambri said.