Shipping tankers provide the last line of defence against environmental threat during covid-19 oil crisis

Perhaps at no other time over the past century- including the great depression- has the oil market, and in turn, the global economy, been in a greater state of turmoil. 

Given that curtailing production on drilling and refining is both a costly and impractical possibility, especially at the rate at which demand fell during the COVID-19 outbreak, there is an extraordinary international surplus of crude oil for which, currently at least, is no clear sign of re-balance by consumption. 

The main effect of this has been a notable drop to record-breaking low rates. 

For instance, in Texas – America’s crude oil capital – in mid-April, prices were trading negatively, plummeting to $2 a barrel; with the looming spectre of dropping further the longer the crisis continues. 

But that is not the only problem. Perhaps the greater danger is the potential environmental hazard caused by the surplus in reserves since storage capacity has been nearly exhausted. 

Fortunately, other segments of the market, have assumed some of the weight, relieving traditional storage facilities of the immense burden. 

Shipping tankers in particular, have carried record loads of crude oil for the purpose of relieving strain from their international production partners. 

Alshair Fiyaz – shipping tycoon – noted that there was no other option. 

According to Fiyaz: “If we didn’t have the ability to store oil on tankers amidst the demand vacuum triggered by COVID-19, we would likely now be facing a global environmental catastrophe.” 

The shipping industry has become a key player in helping the markets persevere during the crisis, providing the necessary stalling time to allow society to turn the corner and oil demand to pick back up once we return to a new normal. However, as the recovery continues, regulating bodies would be walking a very precarious line to rely solely on oil tankers to hold the tide. 

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