Oil tanker owners find solace in shale as Opec prepares new cuts

LONDON: America’s shale boom could be about to spare the world’s oil tanker owners from a typical Opec ravaging.

The producer group and allies decided on Dec 7 to restrict output from the start of next year by about 1.2 million barrels a day, adding to deeper cuts two years earlier.

Under normal circumstances, that would be a dire turn of events for owners who see cargoes cut almost overnight. But shipping analysts are predicting that, this time, the rise of US shale may well shield shippers.

“Opec+ is reducing their output as US is increasing theirs, hence the overall limited effect for tanker volumes,” said Frode Morkedal, managing director of equity research at Clarksons Platou, an investment banking unit of the world’s biggest shipbroker.

If owners do weather the storm, it would underscore the central dilemma facing the Organisation of Petroleum Exporting Countries as it tries to prop up prices: deeper output cuts risk spurring rival production, especially shale.

The idea of the tanker industry withstanding heavy reductions in Opec production would have been almost unthinkable a few years ago, given the group’s vital importance to seaborne trade.

Saudi Arabia, the world’s biggest exporter, pledged on Dec 7 that it would pump almost one million barrels a day less in January than in November.

At the same time, the US just became a net oil exporter for the first time in 75 years. — Bloomberg