LONDON (Bloomberg) — Frontline Ltd., the world's biggest operator of supertankers, is anchoring ships and declining cargoes after a plunge in charter rates.

"We have stopped trading," and Frontline is "keeping vessels at anchorage," Jens Martin Jensen, Singapore-based chief executive officer of the company's management unit, wrote in an e-mail today. "It makes no sense in using a $100 million asset, with a $160 million cargo value on board, and be making $5,000 a day, plus with all and any risk-taking as well."

Daily returns from hauling two million-barrel cargoes of Middle East crude oil to Asia fell 93 percent since January 19 to $6,538, according to the Baltic Exchange in London. That's less than the $11,601 that Drewry Shipping Consultants Ltd. estimates is needed to meet crew, repair and other running costs.

Supply of the ships in the Persian Gulf, the biggest cargo- loading region for crude oil, is at its highest for at least six years, Imarex ASA, an Oslo-based freight-derivatives broker, said in a report today. Frontline said on May 21 it needs $31,100 a day to break even on the carriers.

The slump in returns will likely accelerate the pace of demolition of ageing, single-hull ships, said Sverre Bjorn Svenning, an analyst at Fearnley Consultants A/S in Oslo.

"Single hulls will be without employment" and are already "at the back of the line" when oil companies are seeking to charter vessels, he said.