Iraqi Embargo May Reduce Supertanker Supply

Frontline among other oil supertanker owners may benefit as Iraq's month long export embargo could accelerate the scrapping of old ships, analysts have said. Iraq, the Middle East's third biggest oil producer, has shipped forty seven percent of its crude since 1999 on vessels at least twenty five years old, according to the London based EA Gibson Shipbrokers Ltd. Oil companies tend to use newer ships, which dominate the fleets of publicly traded ship owners. Old vessels heading for the scrap yard would reduce a glut that has driven tanker rates down by two thirds in the past eight months to fifteen year lows. The Organization of Petroleum Exporting Countries may increase production quotas later this year, the OPEC President Rilwanu Lukman said yesterday. That is another positive sign for ship operators. “The suspension of Iraqi crude oil export for thirty days could be the final nail in the coffin for the older tankers,” said brokerage Enskilda Securities in a note to investors. Frontline, with its modern fleet, “will benefit from increased scrapping activity.” Visit to &to=http://www.neftegaz.ru' target=_blank>NEFTEGAZ