June 13, 2022
Dear Shareholders and Investors,
Our business is constantly shaped by news. As we approach the fifth month of the crisis between Russia and Ukraine, we can better see how this situation is reshaping the flow of energy itself.
A key element in this new reality is sea transportation. The NAT fleet of suezmax tankers is more important than ever in meeting the challenges of this new energy landscape. The loading capacity of our tankers is one million barrels each.
Two weeks ago, OPEC and Saudi Arabia agreed to a larger increase in their oil production than the already-scheduled 400,000 barrels. The new increase now will be 648,000 barrels in July and again in August. This translates to more oil on the water and higher demand for the NAT suezmax tankers.
EU also agreed on a ban of Russian Oil. Europe imported about one third of its oil from Russia before the events in Ukraine unfolded. Going forward, Europe can be expected to source a large part of this oil from other suppliers further away, such as West Africa, Middle East and Americas. This translates to longer distances and more need for our suezmax tankers.
Last time Nordic American had Russian oil on board our tankers was in April 2021.
There is a strong pressure on oil producing countries to increase their production. Oil is needed to create welfare - this is an established fact for decades.
The low supply of new oil tankers joining the global fleet in the coming years is positive for NAT. Major Asian shipyards report there is limited yard capacity to deliver large oil tankers before 2026, creating favorable supply/demand dynamics for our fleet of versatile suezmax tankers.
Nordic American Tankers Ltd, press release