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Friday, December 15, 2017

Three threats to (crude oil) tanker demand

1.      The International Oil Daily reports that according to a Canadian National Energy Board (NEB) report released this week, Alberta oil sands production could nearly triple from 1.1. mbd in 2005 to 3 million barrels day (mbd) by 2015. This could mean that the U.S. could reduce oil imports from the Middle East and other overseas sources. Canada’s oil sands are the second largest known hydrocarbon reserves in the world. 

2.      China will from this year receive 0.2 mbd oil from Kazakhstan via an oil pipeline. According to the Energy Intelligence Group,Russia has started construction of the USD 7.2 billion East Siberian oil pipeline to China and other Asian markets. The final route may be diverted away from LakeBaikal, which could add another billion dollars to the cost. The first pipe-joint was welded at the end of April near Taishet, the starting point of the 2,284 km line. On completion in 2008, the line will pump 0.6 million barrels per day to China. 

3.      Saudi Arabia has decided to build two new large export refineries to be completed by 2011. Saudi has announced that they will increase oil production capacity by 2.5 mbd to 12 mbd by 2010. However, the main part of this may then be exported as products rather than crude and benefit product tankers rather than crude oil tankers. India is also increasing refinery capacity with the biggest project being the 0.54 mbd expansion of the Jamnagar export refinery. It will take on three VLCCs to accommodate this expansion, but this will also benefit the product tanker market. Essar Oil is completing a 0.2 mbd refinery this year, and in addition India is planning several other refinery projects. 

Contact: Erik Ranheim