Shipping faces oil price volatility but risk systems can help firms with choppy waters
By Branko Ilic at OpenLink
Oil is making waves in the shipping
industry – with firms across the sector falling under
extreme pressure as the prices continue to fluctuate. Having
recently dropped to below $40 a barrel following the Doha
talks, the volatile price of oil is seriously affecting bottom
lines. Therefore, it is clear that, in order for shipping firms
to navigate their way through these uncertain times, strong
risk management will be key.
The industry is a very different place to
what it was five years ago, as falling oil prices has triggered
a shift in mentality around the type of contracts firms lock
themselves into. Suppliers are reticent to tie themselves into
long term agreements as demand cannot be guaranteed and
volatile prices can make an unutilised ship extremely costly.
Ship owners on the other hand are always looking for ways to
enter into long term deals so they can hedge and lock in future
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