Saudi Arabia’s National Shipping Co., formally known as Bahri, has booked 8 additional supertankers to ship oil from the kingdom’s main oil ports this month and the next in anticipation of a sharp increase in production. While preliminary bookings such as this typically fail, each of these tankers, amongst which are the Dalian, Agios Sostis and the Hong Kong spirit, can hold 2 million barrels of oil and underline to what extent the Saudis expect to see a production increase. 

This follows very closely on the heels of the breakdown of oil talks between OPEC and allied producers, most notably of which were the Russians. Most of the routes booked are to the Gulf of Mexico, which only builds onto the agony of U.S. shale manufacturers already deep in the throes of debt and aggrieved by plummeting oil prices. 

Saudi-owned Aramco has pledged 12.3 million barrels per day in April, a 25% increase from February. Prices have dropped off to their lowest since 1991 on Monday, March 9th, during a time of potentially raised supply although demand is expected to decrease this year due to the outbreak of Covid-19.

“No one needs that much more oil, and that’s why oil prices have collapsed,” says Chief Shipping Analyst Peter Sand, from the industry group BIMCO. “The current global supply increases are not being driven by demand growth, they are mainly caused by producers.”

This influx of supply could potentially be headed for storage, however, due to the lack of demand growth that has resulted from the outbreak of Covid-19, which has spread to dozens of countries and killed nearly 4,000 people globally.

According to one source, the additional supply will require more tankers to effectively supply the Asian market, which is Aramco’s largest and most lucrative market. Another source, a shipbroker who plays a part in booking shipping vessels, claimed that he is unable to recall Bahri booking the routes that they have to the Gulf Of Mexico for the past several years. 

Bahri currently owns and operates a fleet of 41 supertankers, which makes it one of the world’s largest companies of its type. Bahri’s size has meant that Saudi Arabia has been largely independent of other companies to ship its crude.