OPEC meeting critical for tanker market

With reports surfacing almost from every member of the OPEC regarding the oil cartel’s intentions regarding the upcoming – once again crucial – meeting (28th May), tanker owners are anxiously awaiting for the producers’ decision.

Although the prevailing stance is to keep oil production unchanged, there are indications of yet another surprise cut, which could further dampen the tanker market’s revival. Freight rates for tankers have been on the down side from the beginning of the year, with some analysts and market specialists indicating that the recent rise in oil prices could turn things around. Still, these market fundamentals spell bad news for single-hull tanker trading after 2010. Although, it already makes little sense in keeping a single-hull tanker employed, some owners would be more than happy to be able to maintain their older fleet in the market. In fact, there are owners who are looking for loopholes in the IMO Marpol phase-out rules, which would enable them to continue to trade single-hull tankers beyond 2010. According to London-based Gibson, several flag states have indicated that they would continue to allow single-hull tankers to stay on their registries up until 2015, the absolute final ‘drop dead’ date for tankers. The provision for these so called loophole extensions has always existed within the framework of the regulation from the initial draft under the Condition Assessment Scheme (CAS).
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