OPEC + seeks to turn on the taps
The Organization of the Petroleum Exporting Countries and allied nations (OPEC+) confirmed on Wednesday that they will try to increase the production of crude oil barrels by around 2 million extra barrels per day for August.
At almost any other moment in history, the promise of oil producers pouring millions of barrels of crude to the global market would have been cause for celebration in the world’s shipping hubs. However, in August OPEC+ will still be producing 7.7 million fewer barrels of crude compared to times before the coronavirus pandemic, which triggered global blocks, a collapse in oil demand and restrictions on oil supply.
Besides that, Saudi Arabia and Russia appear to be determined to use much of their extra production to meet their internal oil demand. In other words, there will be no hike in cargoes, which coupled with a high inventory drawdown, could further undermine the tanker market.
On top of that, ships that has been storing crude are increasingly exiting that trade, freeing them to seek charterers. From an absolute perspective, global oil transportation is still down substantially.
For more news follow us on LinkedIn
WBL Shipping Agency