Geopolitical developments continue to drive maritime crude oil tanker rates (2/5/2020)

Following nearly 10 years of relative price stability, shipping rates for crude oil tankers have fluctuated widely since mid-2018 because of a combination of geopolitical events and changes to maritime fuel specifications. The U.S. Energy Information Administration (EIA) estimates that an average of 100.8 million barrels per day (b/d) of liquid fuels were consumed globally in 2019. Approximately 42% of global crude oil was transported by waterborne vessels. Although some—typically larger—oil companies own and operate their own fleet of tankers, most crude oil is transported by specialized shipping companies, which charge either the buyers or sellers a fee for their service, known as the freight or charter rate. As seen in Figure 1, these rates charged by shipping companies can vary considerably depending on both macro-level factors, such as the supply of available vessels and the demand for crude oil, and micro-level factors, such as a vessel’s hull configuration, age, route, size, and the share of its capacity that a delivery will use.net exporter in September 2019. ... More »