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Brief Red Sea Scenario Analysis

Jan. 26, 2024

The tensions in the Middle East have driven up the risk premium on crude prices.  There is concern that military clashes between Israel and the Palestinian Islamist group, Hamas, could escalate into a broader regional conflict, with markets worried the conflict could expand and disrupt wider Middle Eastern supply.  Given the uncertainty of the situation, we look into a few potential scenarios and discuss changes in tanker demand.

In the scenario where the Red Sea choke point is completely shut down due to continued attacks, our scenario analysis anticipates owners to reroute around the Cape of Good Hope, significantly boosting ...

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Libya’s Force Majeure

Jan. 12, 2024

Protests in Libya continue to keep approximately 300,000 b/d of supply off the market following the shutdown of Libya’s largest oil field last week.  The shutdown could weigh on January Esharara exports from the Zawia terminal.  Prior to the force majeure, Libyan oil fields and terminals have enjoyed a relatively disruption-free 12 months, making last year's crude exports the second-highest since the civil war in 2011.   However political instability has been recurring since the overthrow of Muammar Gadaffi over a decade ago and now threatens the country’s exports headed into 2024.  The recent shutting of ...

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OPEC vs Non-OPEC – The Upcoming Year

Jan. 5, 2024

The new year has the potential to feature a shifting dynamic between OPEC and non-OPEC producers.  OPEC+ garnered much attention with significant production cuts during the course of 2023.  The de-facto leader, Saudi Arabia also extended their voluntary cut of 1 million b/d that had previously been announced in June.  They cited weakness in oil prices driven by financial speculators and also concern over the forward-looking economic outlook as part of the rationale.  This sets the stage for more geopolitical volatility headed into 2024, usually a good omen for tanker owners.  To this effect, the markets will also be ...

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