Saudi Arabia’s oil production cuts have hit the tanker market so hard that owners of the biggest vessels are effectively subsidizing cargo deliveries on the industry’s main trade route.
Supertankers delivering 2 million-barrel shipments of the kingdom’s oil to China are losing $736 a day for the privilege, according to data from the Baltic Exchange in London on Jan. 19. While owners might, in practice, be able to mitigate such losses by ordering captains to sail the vessels slower, the reality is that some ships are losing money on Middle East-to-Asia deliveries, according to Halvor Ellefsen, a shipbroker at Fearnleys.
