Falling oil tanker rates a growing safety concern

Despite the 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 big concern and something that we’ll continue to watch very closely," David Cotterell, director of the Oil Companies International Marine Forum, told Bloomberg. "We’ve seen from previous downturns that one of the things that happens quickly is the need to reduce costs on vessels. One of the ways to reduce costs on vessels is crews and also on 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.

Information on the crude oil tanker industry can be found at PennEnergy's Research area.

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