Falling Oil Tanker Rates Pose Growing Safety Concern

Despite high crude oil prices, oil tankers are facing trying times, as rates around the world continue to fall, according to Bloomberg.

While concerns about supply have pushed up the price of crude oil, actual demand remains relatively low with many economies around the world slowing. This has combined with an overabundance of tanker ships to push down oil tanker rates, placing increasing pressure on many in the industry to cut costs.

It’s a large concern, according to industry experts, who fear that shipowners will feel the need to reduce costs on vessels. One of the ways to reduce costs on vessels is by cutting crews and also maintenance.

Through March, 15 crew members were killed in four separate oil tanker fires, highlighting the seriousness of the problem.

However, Reuters reports that tanker rates in the Middle East have actually risen substantially, as concerns linger about supply disruptions, though the current demand stems more from stockpiling than current demand (Bloomberg).