‘The party hasn’t even started yet’

The sweet spot for rates is when disruptions are severe enough for inelastic vessel capacity to fall behind demand, but not so severe that demand is destroyed and the global economy melts down. Bad news is good news, until it gets too bad.
“The market likes chaos and dislocations,” said Bart Kelleher, CFO of Ardmore Shipping.
According to Scorpio Tankers President Robert Bugbee, “The party hasn’t even started yet. The host may be drinking a couple of drinks but nobody has come yet. They are at the pub, waiting to go to the party later. The stress hasn’t even begun to be put on the product-tanker market."
“What we are worried about and I’m sure some of the other people here are worried about is that this gets too good,” said Bugbee. “This could get crazy. We cannot do the mathematics now to get required [future] demand for products to match the ships able to transport it.”
On the geopolitical front, the Russia-Ukraine war has been a boon for tankers. One moderator asked a tanker panel: “Do you have any concerns on the horizon — maybe [Russian President Vladimir] Putin concedes?”
But geopolitical chaos, like the energy crunch, is only good for rates if it doesn’t go too far. LNG shipping panelists warned of dire consequences in the event of a China-U.S. war.
“If that happens we’re all screwed,” said Oystein Kalleklev, CEO of $Flex LNG(FLNG.US)$. “It’s almost not even worth worrying about because the consequences are so big. Russia and Ukraine would look like a small bump in the road compared to what would happen. You would have an energy shock like you’d never seen before. The whole world economy would stop. It would be like the Great Depression.” $Camber Energy(CEI.US)$ $Imperial Petroleum(IMPP.US)$ $Occidental Petroleum(OXY.US)$ $Crude Oil Futures(JUL4)(CLmain.US)$ $Exxon Mobil(XOM.US)$