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Oil Tanker Firms Grapple with Reversal of Fortune

Matthew V. Veazey
Oil Tanker Firms Grapple with Reversal of Fortune
Oil Tanker Firms Grapple with Reversal of Fortune

This article was first published on Rigzone here

As the global oil and gas industry was scrambling earlier this year to adjust to dramatically worsening market changes brought on by COVID-19 lockdowns, firms engaged in storing crude oil enjoyed a relatively favorable position. Their situation has since changed dramatically, and Rigzone’s downstream-focused readers have shown a strong interest in the topic recently.

Keep reading for details on evolving tanker market conditions, along with other hot topics, in this review of some of the most popular downstream-related articles on Rigzone from the past week.

Oil Supertanker Windfall Disappears

During the spring of this year, crude oil storage represented a bright spot in an otherwise bleak oil market. At the time, supertanker owners could easily charge oil traders six-figure daily storage rates to store crude amid a worldwide oil glut. Given the ongoing oil market rebalancing driven by factors such as production curbs and a recovery in demand, tanker owners have seen their leverage evaporate and rates fall to the four-figure range. Analysts quoted in this Bloomberg article also do not expect market conditions to improve for supertanker owners in the near term.

Fire Breaks Out on Oil Tanker

Negative oil tanker news this past week was not limited to market conditions. As this staff-written article reveals, a Panama-flagged vessel carrying 270,000 metric tons of crude oil from Kuwait to India caught fire east of Sri Lanka. The Sri Lankan navy responded to a distress call from the ship following an boiler explosion in the engine room. The navy added that it was working with officials from India and Sri Lanka to contain the spread of the fire and that one member of the tanker’s 23-person crew had still not been located.

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$200B Australia LNG Boom Waylaid

Despite massive investments in LNG export infrastructure over the past decade, Australia’s drive to become the world’s top LNG exporter has been rocky. As this Bloomberg article states, two of the country’s high-profile LNG projects suffer from operational challenges – ranging from broken equipment to striking workers. Moreover, it points out that urbanites in eastern Australia who face gas shortages partially blame LNG exporters for their hardship. Such LNG-related problems, coupled with changing views on long-term LNG demand tied to COVID-19, are stoking a debate between the Australia’s pro-industry government and environmental activists about the country’s energy mix.

To contact the author, email mveazey@rigzone.com.

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