Nordic American Tankers Limited (NYSE:NAT) - Shortfall of Middle East oil supply. Some observations.
September 16 2019 - 6:55AM
Hamilton, Bermuda, September 16, 2019
We have assessed the situation following the attack on Saudi oil
installations at the end of last week. About 50 % of Saudi oil
production has been impacted. This is about 5-6 mill barrels
a day which need to be sourced from elsewhere. This is more than 5
% of world oil consumption.
An analyst of Arctic, a Norwegian based investment banking and
securities firm, writes as follows this weekend:
“This is a bullish turn for the tanker market - period. Forget
talk of lower Middle East flows depressing tanker demand. We
believe refinery purchasing managers now are thinking inventory
building and security of supply. Oil will be harder to come by and
will have to travel farther from US, Brazil and Russia and
elsewhere. In such a scenario, the opportunity cost of
being uncovered on transport is bound to rise, hence pushing rates
higher and available tonnage lower.”
There are many observers having a view on the matter at
hand. A common denominator, which is also our
experience, is that political uncertainty of this nature is
normally good for the market. We believe that the short term
impact will be positive – as the amount of transportation work – so
called tonne- mile – can be expected to increase.
The shortfall of oil exportation from the Middle East to
the Far East can be expected to be taken up by exports from
suppliers further away such the US, Brazil, the North Sea, West
Africa and other locations. This is positive for our uniform
suezmax fleet.
In our group, we have experts who have been involved in the
tanker industry and economics for several decades without claiming
to know the “truth” in all respects.
However, it remains a fact that what we have seen is a very
important development that will probably affect our industry – as
far as we can see – positively.
Supply and demand are always decisive.
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS
Matters discussed in this press release may
constitute forward-looking statements. The Private Securities
Litigation Reform Act of 1995 provides safe harbor protections for
forward-looking statements in order to encourage companies to
provide prospective information about their business.
Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements, which are other than
statements of historical facts.
The Company desires to take advantage of the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995 and is including this cautionary statement in
connection with this safe harbor legislation. The words "believe,"
"anticipate," "intend," "estimate," "forecast," "project," "plan,"
"potential," "will," "may," "should," "expect," "pending" and
similar expressions identify forward-looking statements.
The forward-looking statements in this press
release are based upon various assumptions, many of which are
based, in turn, upon further assumptions, including without
limitation, our management's examination of historical operating
trends, data contained in our records and other data available from
third parties. Although we believe that these assumptions
were reasonable when made, because these assumptions are inherently
subject to significant uncertainties and contingencies which are
difficult or impossible to predict and are beyond our control, we
cannot assure you that we will achieve or accomplish these
expectations, beliefs or projections. We undertake no
obligation to update any forward-looking statement, whether as a
result of new information, future events or otherwise.
Important factors that, in our view, could cause
actual results to differ materially from those discussed in the
forward-looking statements include the strength of world economies
and currencies, general market conditions, including fluctuations
in charter rates and vessel values, changes in demand in the tanker
market, as a result of changes in OPEC's petroleum production
levels and worldwide oil consumption and storage, changes in our
operating expenses, including bunker prices, drydocking and
insurance costs, the market for our vessels, availability of
financing and refinancing, changes in governmental rules and
regulations or actions taken by regulatory authorities, potential
liability from pending or future litigation, general domestic and
international political conditions, potential disruption of
shipping routes due to accidents or political events, vessels
breakdowns and instances of off-hires and other important factors
described from time to time in the reports filed by the Company
with the Securities and Exchange Commission, including the
prospectus and related prospectus supplement, our Annual Report on
Form 20-F, and our reports on Form 6-K.
Contacts: |
|
Gary J.
WolfeSeward & Kissel LLPNew York, USATel: +1 212 574 1223
|
|
Bjørn Giæver,
CFONordic American Tankers LimitedTel: +1 888 755 8391 or
+47 91 35 00 91 |
|
Herbjørn Hansson, Chairman & CEONordic American Tankers
LimitedTel: +1 866 805 9504 or +47 90 14 62 91 |
|
- Nordic American Tankers Limited. September 16, 2019
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