2015 and the price of oil

Unless, of course, the ship has exhaust gas cleaning equipment, but that’s another story altogether. It is significant because it is a rule that, unlike most IMO legislation, will apply across the board immediately to all ships, regardless of age, type, size or flag. How it is to be monitored and enforced is still open to discussion – yet another story.

What was widely expected to happen was that, as ships begin to demand distillate diesel oils in such quantities that refineries can barely cope, the law of supply and demand would cause the cost to shot upwards, creating yet more doom and gloom for ship operators. That might still be the case, of course. What wasn’t predicted was that in late 2014 oil prices would take a drastic dip.

We are all too aware that the price of oil is volatile, to say the least. But the situation may prove that those who adopted the ‘wait and see’ approach made exactly the right decision. Strangely, LNG prices don’t seem to have followed oil downwards.

And what might be the effect on the previously buoyant offshore market? Already people are talking about oversupply of tonnage, and predicting a slump, just as in deep-sea merchant shipping. But as those who find, extract and produce the oil have some influence on its price, things should not work out too badly in oil and gas.

This will be the last of these columns I write as editor. We all reach a time in our lives when we need more time of our own, so it is with some regret, tinged with relief and anticipation, that I step down. We will be pleased to welcome Gavin Lipsith as, I believe, only the 11th editor in our 95 year history. The seven years-plus I have spent in this job have proved interesting and rewarding. Thanks to the belief and investment in The Motorship brand by Mercator Media we have seen it grow, once again, in stature during some hard times for everybody. It has been a pleasure to be part of the marine engineering industry, and I hope to remain onboard as a contributor for many years to come.