Oil tanker companies may be in trouble if OPEC raises cuts

BANGALORE (Reuters) – Any further output cuts by OPEC, coupled with an expected increase in vessels in 2009, may dampen the oil tanker companies’ ability to hold on to higher freight rates, denting their earnings potential in the coming quarters.

OPEC (Organization of the Petroleum Exporting Countries) oil supply fell in March, for the seventh consecutive month, but remained above its target as some members pumped more than agreed levels, a recent Reuters survey showed.

So far, OPEC has delivered roughly 80 percent of its pledge to decrease output by a record 4.2 million barrels per day from September.

But any further increase in OPEC compliance may hurt freight rates.

Reuters