Companies that operated supertankers certainly had a rough day yesterday as management at Frontline
Ship Finance International
The big picture doesn't get better
Financial problems may look bad now, but there doesn't appear to be any light at the end of the tunnel for tanker owners. The biggest oil market in the world, the U.S., is finding more and more of its oil domestically, reducing the need for oil tankers to ship it from the Middle East.
There's also the problem of a growing supply of tankers coming onto the market. The overall oil tanker fleet is expected to grow 11.2% in 2011 and 8.7% more in 2012, according to Fernresearch.
Foolish bottom line
Yesterday, fellow Fool David Williamson said he thought Frontline could survive mostly because John Fredricksen owns a large stake in the company and wouldn't let it sink. But I think the problems in the tanker market are too big for Fredricksen to fix himself, and investors should run as fast as they can from these stocks.
Interested in reading more about oil shippers? Add them to My Watchlist, which will find all of our Foolish analysis on these stocks.