Supply Cuts Hit Oil Tanker Market Badly

  • Saudi Arabia’s oil production cuts have hit the tanker market so hard that owners of the biggest vessels effectively subsidize cargo deliveries on the industry’s main trade route.
  • Supertankers delivering 2-million-barrel shipments of the kingdom’s oil to China are losing $736 a day for the privilege.
  • While owners might, in practice, be able to mitigate such losses by ordering captains to sail the vessels slower.
  • The reality is that some ships are losing money on Middle East-to-Asia deliveries.

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