Tankers hauling 2 million-barrel cargoes are delivering them at speeds of about 13 knots, compared with a maximum of 15, Paddy Rodgers, chief executive officer of Antwerp, Belgium-based Euronav NV, said in an interview in London on Thursday. The slower speeds might result in a voyage that would normally take 40 days instead lasting 48. Shore-based supplies are getting so big that it’s probable the need for storage at sea may soon grow, he said.
Paddy Rodgers speaks during an interview in London.
Photographer: Chris Ratcliffe/Bloomberg
The market is contending with a glut of oil that’s not going away because OPEC is insisting it didn’t create the excess and won’t tackle it alone. Countries within the Organisation for Economic
Cooperation and Development have a near-record of almost 3 billion barrels of oil stockpiled, the International Energy Agency estimates.
“I’ve not seen a supply-side market like it in terms of the production of oil,” said Rodgers, a lawyer who joined Euronav two decades ago and is based in London, after an earlier interview with Bloomberg Television. His company’s VLCCs earned $55,000 a day last year, double what they made in 2014, thanks in part to fuel prices that plunged along with crude, he said.
Euronav’s shares rose 8.9 percent to 11.30 euros in Brussels. They’ve dropped 11 percent this year, giving the company a market capitalization of 1.78 billion euros ($1.94 billion).
The primary reason for slower speeds is because the supply of oil is so great that logistics are being strained at the sites where the cargoes are being delivered, Rodgers said. In China, average waiting times are about a week when normally there would be no delay, he said. Vessels are having to wait in the Middle East as well, which is also an abnormality, he said.
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