Massive OPEC Cuts Not Enough To Derail Tanker Earnings Never before has oil production been slashed this much this quickly, but it still isn't enough to offset coronavirus demand destruction. OPEC and cooperating non-OPEC countries such as Russia (a coalition known as OPEC ) will cut output by 9.7 million barrels|day (b|d) in May-June, 7.7 million b|d in July-December and 5.8 million b|d in January-April 2021. Coronavirus demand destruction is estimated to exceed 20 million b|d. Continued excess production will pull more tankers into use as floating storage, reducing the number of vessels bidding for spot voyage deals and prolonging historically high rates. "In any other time, an output cut of this magnitude would be the death knell for the tanker industry," said Evercore ISI analyst Jon Chappell. "But with the reductions failing to match the estimated demand destruction, inventories are still likely to build materially … pressuring near-term oil prices and incenting floating storage. "Tanker stocks are the only place for energy capital before the demand|supply imbalance inflects," maintained Chappell.