Tanker operators see margin boost as crude prices retreat

London

TANKER operators are expecting bigger profit margins as low oil prices slash the cost of fuel and encourage traders to ship more crude around the world. Current-quarter gains for shipping companies such as Teekay Tankers and DHT Holdings could last until the middle of next year as oil prices - currently at four-year lows - remain depressed. Oil has lost more than a third of its value since June.

US crude dipped below US$70 a barrel on Nov 27 after Saudi Arabia blocked calls for output reductions from some members of the Organization of the Petroleum Exporting Countries. Traders are profiting by moving cheaper oil to Asia, where it is sold at higher prices. "The decline in oil prices, and the fact that there is so much oil that needs to move, has resulted in long-haul arbitrage opportunities," said Anthony Gurnee, chief executive of Ardmore Shipping. "Ships are engaged in very long voyages now."