HOUSTON, Aug. 10 -- Cuts in production by members of the Organization of Petroleum Exporting Countries -- set to take effect Sept. 1 -- will depress oil tanker shipping rates as they drive up world crude oil prices.
Reducing the net amount of oil potentially exported increases competition among tankers, forcing some into other geographic markets and thereby depressing tanker rates in those regions.
These are the major conclusions of a mid-year analysis of the effects of OPEC's action earlier this summer by Clarkson Research Studies, London.
The analysis coincides with mid-2001 US crude oil and refined products import data issued by the US Energy Information Administration that showed imports set first-half-year records.
The analysis noted that 61% of OPEC's output, excluding Iraq, is potentially exported from the Persian Gulf. Assuming all OPEC members export the same proportion of their supply and that all of the 1 million b/d cut is in exports, it said, 610,000 b/d will then be removed from the Persian Gulf export market, equivalent to a single very large crude carrier (VLCC; 200,000-320,000 dwt) every 3 days.
Given that, through July 2001, 60% of spot crude oil trade out of the Persian Gulf has moved to the East, 21% to the US, and 5% to Europe, Clarkson estimated that total demand will fall by 0.49 million dwt/month until OPEC again reviews its output.
This equates to nearly 3% of total tonnage demand, meaning that 3% more of the world's tanker fleet will be seeking employment.