Page 3rd Cover: of Maritime Reporter Magazine (January 15, 1980)

oil in the period up to 1985, six areas outside the Middle East emerge as likely sources of sig- nificantly increased supplies of short and medium-haul crudes.

These areas are the three "tra- ditional" suppliers of short and medium-haul crudes — North and

West Africa, the Caribbean (ex- cluding Mexico), and the Far East (excluding the People's Republic of China) — and three relative newcomers—Alaska, Mexico, and the North Sea.

Based on the data from the preceding section, Section Three illustrates the potential impact of the production forecasts on tanker demand. It reappraises the role of the traditional suppliers of short-haul crudes, and ana- lyzes the impact of both these supplies and expanding produc- tion from the "new" areas on tanker demand. The prospects presented by the expanding de- velopment of the oil industry in the People's Republic of China are also reviewed. By the mid- 1980s, supplies of short-haul crude to major markets could po- tentially be sharing an increase in the order of 250 mta compared to present levels. However, if cur- rent political and economic con- straint continue in the producing

Crude Oil Supply And

Tanker Demand Report

Available From Drewry

During the 1970s, the influ- ence and importance of expand- ing oil supplies close to the ma- jor oil consuming nations has grown rapidly. Rising output from new producing areas has in- creased the availability of short- haul crude oil supplies, thereby displacing significant volumes of long-haul supplies in the global pattern of seaborne oil trades.

Growth in aggregate world tank- er demand has consequently been dampened, exacerbating the de- pression in the oil shipping sec- tor. Since the 1973 Oil Crisis, a number of OPEC countries have adopted production ceilings in the interests both of conservation and of maximizing revenues in the long-term. In the wake of the

Iranian Crisis, these ceilings have been strictly applied. Oil exports from the Middle East have for some years served to balance global supply and demand, but since 1973 the political and eco- nomic climate in the Middle East has changed; the new emphasis on conservation has been accom- panied by a manifest unwilling- ness to increase output merely in response to higher energy demand in the major consuming nations.

In this context, oil supplies from non-OPEC areas are becoming in- creasingly sought after, particu- larly "new" supplies from such areas as the North Sea and Mex- ico. H.P. Drewry's Study No. 76, "Crude Oil Supply and Tanker

Demand," focuses on recent and possible future trends in world oil production, and assesses their effect on tanker demand.

This report reviews the world oil market in 1977 when, after a period when the market was dis- torted by the two-tier pricing system, oil supplies were in ex- cess of demand; sluggish growth in demand restrained the growth in both world oil production and consumption. An outline of trends in production, consumption and seaborne oil movements is fol- lowed by an analysis of the tank- er demand generated by intra- area seaborne oil movements, which totaled 299.1 million dwt, compared to an average fleet em- ployment in oil trading for the year of 318.0 million dwt. The difference between the two fig- ures was attributed partly to inter-area trading (20.1 million dwt), but mainly to operating inefficiencies (68.8 million dwt).

Had all the operating inefficiencies been accounted for by slow-steam- ing, then the fleet would have av- eraged 11.75 knots during the year, compared to the commonly accepted normal service speed of 15 knots.

Following a thorough, world- wide, country-by-country exami- nation of recent and expected fu- ture trends in production and available export surpluses of crude

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Report #78-269 NN, dated 27

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