Poten's Weekly Opinion: Back in Control?

Nov 04 2021


OPEC+ seems to have regained its grip on the oil markets.

In early 2020, the OPEC+ group was in disarray.  Saudi Arabia and Russia, the leading producers of the oil exporters organization, disagreed on how to respond to the Covid-19 pandemic, which was then rapidly spreading across the globe.  A brief price war broke out, which proved to be very costly for the OPEC members, and a boon for the tanker market.  Shortly thereafter, realizing their mistake, OPEC circled the wagons and dramatically cut production.  OPEC’s production cut caused a free fall in tanker rates and earnings have been depressed since.  While oil demand has picked up in line with the recovering global economy, OPEC+ has been reluctant to bring back production.

 

The oil exporters are only slowly trickling oil back into the market and they are still producing several million barrels per day below pre-pandemic levels.  This has kept crude oil tanker rates at extremely low levels.  Non-OPEC (in particular U.S. shale production) has not reacted to the increase in prices and it appears that the cartel is in the drivers’ seat for the moment.  However, the situation may not be as comfortable as it appears on the surface.

 

Download The Weekly Opinion

 



Related News

Developments at OCIMF

(Nov 11 2021)

In its May, June and July newsletters, OCIMF reported on finding a pathway with climate change, West Africa piracy government initiatives, and concerns about marine loading arm maintenance, and much more.



Poten's Weekly Opinion: Making Waves in The Pacific

(Nov 11 2021)

The Aframax trades in the Pacific are due for a change.



Iran frees Vietnamese oil tanker that it seized

(Nov 11 2021)

Vietnamese oil tanker reaches international waters after Iranian military took control of it October 24.



US denies Iranian account of attempted oil tanker capture

(Nov 04 2021)

Claims by Iran’s Revolutionary Guards that they thwarted a US attempt to capture Iranian oil on a tanker in the Sea of Oman are untrue, US officials have said.



Iran seized Vietnamese oil tanker

(Nov 04 2021)

Iran seized a Vietnamese-flagged oil tanker in the Gulf of Oman last month and still hold the vessel off Bandar Abbas, two US officials told The Associated Press.



Oct-Nov 2021

Behavioural competency assessment - crew mental health - Ardmore Shipping - understanding CII - rotor sails - aft peak tank ballast