zoomImage Courtesy: Maritime Cyprus

The shifting winds in the oil industry heralding a decline in oil demand amid global shift to renewable sources of clean energy do not necessarily mean that the need for transporting oil and oil products would disappear anytime soon, it was heard at a panel held within the framework of the Maritime Cyprus 2017 conference in Limassol.

According to the panelists, who included Robert Burke, CEO of Ridgebury Tankers, Rob McLeod, Head of Risk Marketing of Hartree Partners Advisory Services UK Limited and Kevin Oates, Managing Director of Marine Money Asia Pte, the talks on extinction of tanker owners are highly unrealistic, at least not for the next 25 years which is the lifespan of existing tankers.

One of the issues highlighted at the panel on Monday was that it is “not possible that the world will no longer need crude oil and clean products or that oil will be able to be transported from source to consumption without using tanker vessels.”

As stressed, the shift toward renewable energy being pursued in the West will result in an increase in demand for oil in Asia, Africa and other emerging economies of the world. However, a dramatic change in trade routes is likely going forward along with the tanker fleet size in order to adjust to the changes in demand.

Nevertheless, the anticipated energy market changes are rendering tanker owners vulnerable, especially at a time when the tonnage supply-demand balance has been distorted pushing earnings down.

A market recovery is expected in the next couple of years, the panelists said, stressing that maintaining a balance between supply and demand is essential to ensuring a bright future for tanker owners.

The higher scrapping of crude oil tonnage, which picked up over the last few months, especially in August, bringing more balance to the demand-supply side, is expected to contribute to the needed market rebound.