Tanker rebound on hold as OPEC+ fails to strike new output deal

Tanker players have been left hanging again after OPEC+ abandoned its meeting without a deal to increase oil output from August.

With rates well below breakeven, the new OPEC+ deal and a potential lift of sanctions on Iran were seen as a lifeline for tankers to finally get back in the black.

There had been no progress in resolving a spat between Saudi Arabia and the United Arab Emirates and yesterday’s meeting was called off, with no new date agreed upon.

Last week, the UAE accepted to raise output in stages by about 2m bpd from August to December but dropped a proposed eight-month extension to output cuts.

Oil prices are at the highest since 2018 and have already given rise to concerns inflation could hinder a global recovery from the Covid-19 pandemic.

Tanker owners could now be looking at even lower vessel demand and higher bunker prices, while they wait for another OPEC+ meeting that could shed some light on what is next for the tanker sector.

Tanker rates have been consistently negative, and the sector’s financial results have been shaping up to be historic for all the wrong reasons. Clarksons said in its latest report that visibility is still limited for tankers recovery without the OPEC+ deal, while Allied Shipbroking argues recovery is a matter of when, not if – mostly based on a crude output hike.

Adis Ajdin

Adis is an experienced news reporter with a background in finance, media and education. He has written across the spectrum of offshore energy and ocean industries for many years and is a member of International Federation of Journalists. Previously he had written for Navingo media group titles including Offshore Energy, Subsea World News and Marine Energy.
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