Bloomberg News

Kuwait Strike May Reduce Oil-Tanker Cargoes, Lorentzen Says

October 11, 2011

Oct. 11 (Bloomberg) -- A strike by customs workers in Kuwait, OPEC’s fifth-largest oil producer, may reduce available cargoes for the largest crude tankers, according to shipbroker and consulting firm Lorentzen & Stemoco AS.

About six tankers were prevented from leaving Kuwaiti ports yesterday as customs employees seeking higher salaries began industrial action, Fahad al-Ajmi, a union board member, said by phone today.

“If the strike persists through the week and beyond, there will be fewer very large crude carrier cargoes,” Thomas Zwick, an analyst at Lorentzen in Oslo, said by e-mail today.

Kuwaiti crude exports total about 2.5 million barrels a day, more than enough to fill one VLCC, and the “current strike could therefore adversely affect this market,” said Zwick. Daily returns for VLCCs hauling Middle East oil to Asia strengthened today to minus $5,041, according to the London- based Baltic Exchange, which assesses freight rates on international routes.

Global oil-tanker demand will advance 4.9 percent this year to 144.6 million deadweight tons, according to Clarkson Research Services Ltd., a unit of the world’s largest shipbroker. That’s less than its projected 8.1 percent expansion of the fleet to 173.1 million tons.

--Editors: Dan Weeks, John Deane.

To contact the reporter on this story: Rob Sheridan in London at rsheridan6@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net


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