A different ball game

It is not a cycle. We are going through metamorphosis.

Dawn of this century, the stage has shifted to, where the audience is (the populous Asian states). Downstream has always been a high investment -low return industry and it will survive only where the action is. Hence we see this mass shift in oil and gas equation.

Refining Margins, which catapulted for a short period during 2004-2008, prompted a huge capex worldwide, specially in non-OECD countries, into setting up of new refineries and expansion & upgradation of existing facilities. And by choice, the momentum was, and is, clearly towards the developing world. But now, with GRM drifting into the red zone, it is time for consolidation and we will see a different mosaic emerging on the world energy and sea transportation map.

In the macro picture, I see the 'mobile' tanker trade shrinking because of the lost nautical miles in the new dynamics of the oil trade. But at the same time, information technology has given a big boost to speculative instinct of man and the tankers have proved to be an ideal hedging implement. Long live the Ocean and it's masters.