Saudi Aramco shipping executives worry over tight oil tanker market

Shipping executives at Saudi Arabian Oil Co., or Saudi Aramco, say they are worried rocketing oil demand could strain the global tanker market. Concerns of possible supply-chain bottlenecks were raised in the company's first ever summit between marketing, oil supply and shipping units, Aramco said.
"The energy industry is probably headed toward what could be characterized as uncharted territory, with global crude oil demand reaching 100 mm bpd in the next few years," said Khalid al-Dabbagh, the head of Aramco's US marketing arm, Saudi Petroleum International, said.

Shipyards are shying away from building more tankers in favour of other kinds of more profitable boats and oil companies will be using the spot shipping market more as they sell off their own fleets, analysts at the meeting said. The tighter tanker supply underpinning rising freight rates won't spur new investment in the sector, analysts warned.
Rising freight and shipbuilding costs could have a big impact on Aramco, which owns one of the world's biggest fleets of very large crude carries, 21 tankers that can carry as much as 2 mm barrels of oil, through its subsidiary Vela International Marine. It's also a major player in international tanker chartering markets, loading oil on extra tankers when demand is high or its own boats are unavailable.

The International Energy Agency warns in its long-term energy outlook that more oil will be travelling over longer distances as the world increasingly relies on Middle East supplies.
"It is especially challenging for Saudi Aramco, given the possibility that the forces that drove crude oil and shipping markets in the past may no longer be applicable in the future," al-Dabbagh said.