Oil Prices: OPEC+ Cuts Rollover Depresses Already Weak Oil Tanker Market

Related stories

Tinubu Departs Saint Lucia, Heads to Brazil for BRICS Summit

By Abiola Olawale President Bola Ahmed Tinubu departed Saint Lucia...

2027: Drama, Intrigues as Julius Abure Tells Otti to Quit Labour Party

By Abiola Olawale In a dramatic turn of events, Barrister...

FG Secures $100m for Lagos-Calabar Project from ECOWAS Bank

By Abiola Olawale The Nigerian government has reportedly secured a...

Ex- Arsenal Star Thomas Partey Faces Rape, Sexual Assault Charges in UK

By Abiola Olawale The Metropolitan Police have formally charged former...

Edwin Cortes: Prefers Being A Small Puerto Rican Than Big American

By Owei Lakemfa To be a citizen of the United...

By Charles  Kennedy 

Oil tanker owners and shipbrokers are set to suffer longer than expected from the massive OPEC+ production cuts after the coalition surprised the oil and tanker markets on Thursday by deciding to keep oil production flat in April.

The cuts from the OPEC+ group were already hurting the oil tanker market at the start of this year amid reduced availability of seaborne shipments from the world’s top oil exporter, Saudi Arabia, and a rising number of oil tankers available on the market after months of serving as floating storage.

As early as in January, the cuts and the oversupply of tankers had hit the earnings of supertanker owners so much that some were losing money on shipping crude from the Arab Gulf to China, shipbrokers and analysts told Bloomberg at the time. Saudi Arabia’s surprise announcement in January that it would cut an additional 1 million barrels per day (bpd) from its crude oil production in February and March reduced crude shipments in the market for supertankers, vessels capable of carrying up to 2 million barrels of crude oil each.

Moreover, the recent significant decline in global floating oil storage has made more supertankers available on the market for shipping crude on the main oil trade routes. The rally in oil prices has deepened the backwardation, which has removed the ‘contango play’ incentive for traders holding oil in floating storage, while demand in Asia provided an outlet for the stored oil.

This week’s decision from OPEC+ to keep April’s production basically unchanged—with small exemptions for Russia and Kazakhstan—and Saudi Arabia extending its extra 1-million-bpd cut through April further hurt tanker owners and delay the recovery of tanker rates.

Shares in major oil tanker owners slumped on Thursday, with Frontline losing 3.5%, International Seaways dropping nearly 5%, DHT Holdings down 3%. “The mood is depressed,” Halvor Ellefsen, a tanker broker at Fearnleys, told Bloomberg, commenting on the surprise OPEC+ move. “A continuation of the cuts is the last thing we needed.”

*Culled from  Oilprice.com

Hamilton Nwosa
Hamilton Nwosa
Hamilton Nwosa is an experienced, and committed communication, business, administrative, data and research specialist . His deep knowledge of the intersection between communication, business, data, and journalism are quite profound. His passion for professional excellence remains the guiding principle of his work, and in the course of his career spanning sectors such as administration, tourism, business management, communication and journalism, Hamilton has won key awards. He is a delightful writer, researcher and data analyst. He loves team-work, problem-solving, organizational management, communication strategy, and enjoys travelling. He can be reached at: hamilton_68@yahoo.com

Subscribe

- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from up to 5 devices at once

Latest stories

NDN
Latest News
Tinubu Departs Saint Lucia, Heads to Brazil for BRICS Summit2027: Drama, Intrigues as Julius Abure Tells Otti to Quit Labour PartyFG Secures $100m for Lagos-Calabar Project from ECOWAS BankEx- Arsenal Star Thomas Partey Faces Rape, Sexual Assault Charges in UKEdwin Cortes: Prefers Being A Small Puerto Rican Than Big AmericanJune 12 And The International Pursuit of Justice For Abiola, By Femi FalanaBreaking Down the West’s $146 Billion 2024 Defence Technology InvestmentG7 vs. the World: GDP, Population, and Military StrengthUS drillers cut oil and gas rigs for 10th week in a row, Baker Hughes saysExclusive! Tinubu Tips Late Ajimobi's Wife, Florence, Others for Ambassadorial PostsTinubu Mourns, Pays Tribute to Legendary Super Eagles Goalkeeper Peter RufaiNatasha vs Akpabio: Court Orders Senate President To Recall Senator NatashaHadi Sirika Denies Defection to ADC Coalition Rumors, Reaffirms Loyalty to Buhari, APCChina Snubs U.S. Crude for Third Month, Even as Ethane Trade RestartsHow Super Eagles Icon Peter Rufai passed Away at 61
X whatsapp