Chapter 2 Strategic Business Units and Support Departments
Oil Transportation Sector China surpassed the United States as the largest importer of crude oil in the world
the major demand driver for Suezmax tankers, these tankers were forced to compete on the same trade routes used by VLCCs in order to ensure continuity of operations. It is expected that upon the delivery and operation of 31 new VLCCs, and the addition of 16 new VLCCs to the fleet of Suezmax tankers which currently operate a fleet of 25 – 30 tankers, there will be a surplus of VLCCs in the shipping market. However, the growth rates of oil consumption in China and India is encouraging and this year, China surpassed the United States as the largest importer of crude oil in the world. Furthermore, China and India announced their plans to increase their strategic reserves of crude oil.
The Oil Transportation Sector is the Company’s largest sector which performs the transportation of crude oil through a fleet of 17 VLCCs that are operated in the spot market and through time charter agreements. According to analysts, the global demand of crude oil transportation across the Atlantic declined by 4-5% during the first half of 2013. The demand of VLCCs decreased 5-7% while demand for Suezmax vessels, with a capacity of 1 million barrels decreased 30%. This decline was experienced as a result of an increase in the daily production of nearly two million barrels by Shale oil in the United States. Due to the sharp decline in the demand for shipping from West Africa to the United States, which traditionally constitutes
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