US Shale Oil Production to Affect Shipping Earnings

How much US shale oil production is taken out of service will be a key driver of future tanker shipping earnings, according to the latest edition of the Tanker Forecaster published by global shipping consultancy Drewry.

2015.06.02 - US Shale Oil Production to Affect Shipping Earnings

Since domestic shale oil extraction becomes less profitable tanker operators are hoping on a rise in US crude oil imports.

According to Rajesh Verma, Tanker Shipping Lead Analyst at Drewry continued expansion of refinery capacity in Asia is likely to maintain growth in the global oil trade over the next five years. But demand from Asia alone will not be sufficient to sustain the improvement in tonnage utilisation. The only alternative source of growth is a recovery in US oil imports, especially when declining European refinery capacity will mean lower import volumes to EU countries.

After a two year the global trade in oil has accelerated over the past nine months due to increased stocking.

On the supply side, tanker fleet growth is expected to remain muted in 2015, growing at just 1.3% year-on-year, before gathering momentum in 2016, when vessel deliveries are expected to rise over 60% compared to this year. Buoyant fleet growth will also be supported by a slowdown in scrapping activity.

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