Saudi Arabia World leader Oil Fleets
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Saudi Arabia Poised to Become the World’s Leader in Oil Fleets

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Continuing its push to make sure that its oil continues to reach its intended destination, Saudi Arabia announced on July 17 an ambitious plan that’s intent on making sure that the Kingdom has the world’s largest oil fleet.

Putting together an investment fund that will total $1.5 billion, the proposed project will result in the construction of 15 very large crude carriers (VLCC). Those vessels will use a combination of equity and debt to fund the project.

The two companies charged with making this a reality are the National Shipping Co. of Saudi Arabia and the Arab Petroleum Investment Corp, otherwise known as Bahri and Apicorp, respectively.

Bahri was already planning on constructing 46 other VLCC’s, but this addition will make the company the largest in the world when it comes to oil shipping. Currently, that title belongs to China Merchants Group, which has 53 tankers, a number that takes into account ones that they’ve already ordered.

Presently, Saudi Aramco, which is run by the Kingdom, sends out roughly one-fifth of its present supply of oil on tankers. Despite the issues related to the recent steep drop in oil prices, demand continues to increase worldwide, with places like China being one of the main customers due to continued expansion across that vast country.

OPEC is presently expecting that demand to increase to 33 million barrels-per-day, as opposed to the 32.86 million the organization saw in June. In contrast, an expected drop of 900,000 barrels-per-day is projected for those countries not in OPEC.

Bahri will manage the 10-year fund, which is expected to create returns of over 10 percent, from both a technical and commercial perspective. They are supplying 15 percent of the funds involved, while Apicorp will make up the remaining 85 percent.

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