OPIS: Jones Act Tanker Market to Grow with Oil Production Boom

“‘It is much simpler to charter a ship than to approve and build a pipeline,’ to meet the rising shipping demand, Megan McCurdy, who works in business development and consulting at shipbroker and energy advisor Poten & Partners in New York, told OPIS recently….’ However, we continue to be fairly bullish on demand for these assets in both the crude oil and clean refined product trades alike in the near term,’ McCurdy said….[She] added that the entire Jones Act fleet includes more than 300 ocean-going tank barges and tankers that are capable of transporting petroleum in the ‘blue water’ or offshore market. There are also thousands of smaller units involved in the ‘brown water’ or inland petroleum transportation market. Despite some of the prevailing market sentiment of a tight vessel supply, McCurdy said that the Jones Act tanker and barge market today is adequately supplied…. ‘U.S. Gulf Coast refined products supplies, whether moved by pipe, barge or tanker, still have to compete with European or locally available supplies to satiate demand in the Northeast,’ she said. ‘However, we have seen an increased interest in improving flexibility of units (tankers and barges) in order to carry crude oil. Certain modifications may have to be made, namely, installing vapor recovery system to enable vessels to carry crude oil, in addition to clean and dirty refined petroleum products,’ she said. ‘Units (vessels) will switch back and forth between clean and dirty trading over time, but not a voyage by voyage basis. At present, we see strong demand for both crude oil trading and clean refined products, and vessels will elect to participate in the trades that will yield the highest returns,’ McCurdy said.”