The collapse of the negative price of oil transportation .. Will tankers pay the merchants money?

Recent data showed that the price of transporting oil on supertankers (VLCC) fell to negative, for the first time during the year 2021, amid gloomy expectations from Argus Consulting for transportation prices this year.

According to the commodity price index on the site “numbers” Last week, the price of immediate oil transportation decreased to below zero (negative).

Although oil transport prices fell to record levels with the onset of the Corona epidemic, the question that arises is: What does the rate of oil transportation prices mean to be negative .. Do tankers pay money to their merchants’ customers in exchange for transporting barrels of oil?

The answer is, of course, no, as the drop in the rate of oil transportation prices to below zero is an indication that the transport price rate is less than the cost of operating the tanker, and it does not mean that the transport price is negative, or that the tankers pay money to their customers.

According to the “Arqaam” website, the number that appears in the commodity price data regarding immediate oil transportation is the number approved by the transport companies and intermediaries to calculate the profitability of any trip per day. The calculation is by subtracting the tanker’s rental price minus the trip costs, which include bunker fuel and transit fees. Aqueducts (Suez Canal or Panama), mooring fees at loading or unloading ports, in addition to the salaries of workers on deck.

An expert in oil and energy affairs, Nihad Ismail, told “Arabi 21” that the giant oil tankers carry about 20 percent of the global demand for oil.

On Thursday, the International Energy Agency expected that oil demand would witness a strong recovery this year, and make up for a large part of the lost volume in 2020.

The agency said in its monthly report, that “global demand for oil will record 96.4 million barrels per day during the current year, out of nearly 91 million barrels in 2020”, which means a growth rate of 5.4 million barrels per day, which is equivalent to 60 percent of the lost volume last year due to Corona.

The agency estimated that global demand for oil during the first quarter of 2021 would be one million barrels per day, at the same levels of demand in the last quarter of 2020.

Ismail added, “The tanker crisis came due to the cuts of OPEC and its partners in May 2020, oil production, which led to a decline in the demand for tankers, in addition to the use of tankers as floating warehouses on the coasts of Asia, especially China and even Iran, with the shock of the collapse of oil prices and their decline to a negative rate.” “.

On the extent of the impact of the drop in transportation costs on oil prices, Ismail said: “The tankers remain idle and their owners suffer heavy losses, but the impact on crude prices will not be significant, because prices are subject to other factors such as demand and production cuts by OPEC as well as geopolitical and economic factors.” .

The expert in oil affairs expected that shipping prices would gradually recover with the recovery of oil demand in the middle of this year, driven by market optimism about Corona vaccines, and the prospects for a strong return to economic activity.

He continued, “But in the long term, that is, after 15 or 20 years, the future of oil tankers is shrouded in mystery, due to investments in clean renewable energy and a move away from fossil energy.”

And imposed the new and renewable energy industry, a new reality on traditional energy sources, such as crude oil in particular, and natural gas, which are expected to continue growing until 2045 at the latest.

These expectations were agreed upon by the Organization of the Petroleum Exporting Countries, in the “World Oil Outlook for 2020” report, in addition to the International Monetary Fund.

On the other hand, the new (nuclear) energy and renewable energy industry (the sun, wind and hydroelectricity) is proceeding with rapid growth, especially solar energy, which is expected to meet the needs of a third of the energy consumed globally by 2030.

Source: عربي21 by

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