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Cost of Shipping Oil Tumbles as Production Cuts Bite

Home | Press | Cost of Shipping Oil Tumbles as Production Cuts Bite

Charter prices for vessels that transport crude have tanked 77% since their peak in mid-March.

The cost of shipping oil around the world is sliding as sweeping output cuts by crude producers reduce competition for hiring tankers.

After a surge of deals to house oil at sea in April, “the market has fallen off a cliff ,” said Giuseppe Rosano, director of brokerage Alibra Shipping Ltd.

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Charter prices for vessels that transport crude have tanked 77% since their peak in mid-March

The cost of shipping oil around the world is sliding as sweeping output cuts by crude producers reduce competition for hiring tankers.

Charter prices for vessels that transport crude oil have dropped 77% from their March peak, which came during a short-lived battle for a greater share of the oil market between Saudi Arabia and Russia.

Thanks to the effect of production cuts on oil prices, the floating-storage trade is less profitable than it was at the height of the crisis in energy markets.

After a surge of deals to house oil at sea in April, “the market has fallen off a cliff ,” said Giuseppe Rosano, director of brokerage Alibra Shipping Ltd.

By Joe Wallace

(Originally published at wsj.com – 29 May 2022)