(Bloomberg) <\m> The cost of hiring 2 million-barrel oil tankers has fallen so low that operators including Bermuda-based Frontline Ltd., the world’s second-biggest, may be losing money each time they hire out a ship. The benchmark cost of transporting crude oil from the Middle East to Asia on very large crude carriers, or VLCCs, fell to the lowest since April 21 yesterday, meaning Frontline may lose almost $2,000 a day on some of its vessels, based on the company’s own calculations.Frontline, which operates 41 supertankers, and VLCC operators including Belgium’s Euronav NV are struggling because members of the Organization of Petroleum Exporting Countries trimmed crude supplies to halt sliding oil prices. Frontline said yesterday that fourth-quarter earnings will be “weaker.”

The company, led by Norwegian billionaire John Fredriksen, needs $29,966 a day to break even on each of its VLCCs, according to its third-quarter statement. With daily-hire rates slumping to 57.97 Worldscale points yesterday, according to the London-based Baltic Exchange, owners of modern, double-hulled VLCCs earn about $28,158 a day on a 38-day round trip from Saudi Arabia to South Korea, based on a formula by R.S. Platou, an Oslo-based shipbroker, and Bloomberg bunker prices. “If that’s a snapshot right now, then that’s what it is,” Bjorn Sjaastad, who started as Frontline’s chief executive officer last month, said by telephone from Oslo today. He declined to comment further.

Frontline said yesterday that it is “actively” looking for opportunities to hire out its ships to oil companies on so-called long-term contracts, which provide guaranteed daily income. Vessels hired out under such contracts may be more profitable than those operated in the day-to-day, or spot, market.

The company also operates smaller oil tankers, known as suezmaxes, the biggest class of vessel able to pass fully loaded through Egypt’s Suez canal.

London-based UBS AG analyst Dominic Edridge wrote in a report today that weakness in tanker rates is “set to accelerate” in the second half of next year. He downgraded his Frontline recommendation to “neutral 2” from “buy 2” and cut his share-price target after the tanker owner missed analysts’ third-quarter earnings estimates by 16 percent. Shares of Hamilton-based Frontline fell 3.5 kroner, or 1.6 percent, to 219 kroner as 3:24 p.m. in Oslo, valuing the company at 16.4 billion kroner ($2.62 billion). Yesterday, they dropped 7.1 percent, the biggest one-day fall since June.

Most of Frontline’s vessels are bigger than those operated by Nassau, Bahamas-based Teekay Corp., the world’s biggest oil- tanker operator. Frontline’s main publicly traded rivals are Overseas Shipholding Group Inc., the largest US-based oil-tanker owner, and Euronav, a Belgian operator whose vessels by are controlled by Tankers International.