Arctic oil will keep tankers active
An assessment of oil supply over the medium term from the International Energy Agency points to contracting supplies of both oil and gas over the next five years. The report says the widening gap between rising consumption and lagging non-Opec supply will force Opec to sharply increase its production in the next five years, and oil prices are projected to jump beyond current $76+ highs. Figures from Alfa Bank in Moscow show that Russia is now well ahead of Saudi Arabia as the world leading supplier – 9.89M barrels per day compared with 8.58M bpd – although there are concerns that Russian onshore fields are suffering from rising water levels, lower well yields and rising costs of drilling to pump water. Growth in production now depends on new offshore fields coming on line in the northwestern Arctic and Sakhalin region of the Fareast. The impact on tanker demand to transport Russian crude appears limited to western outlets, such as Novorossiysk and Gdansk. Growth of tanker demand in the northwest, including Primorsk, is assured by inflow from new Arctic fields, while the growth of the Sakhalin production will ensure rising tanker demand at De Kastri.