As we work through energy transition, market forces are poised to create asset discontinuities. They are already wreaking havoc with the oil supply chain.

Today’s news from the shipping industry brings energy transition into sharp relief.  An industry monitor noted a collapse in the order books for very large crude carriers (VLCCs, ships that carry two million barrels or more of crude oil). You might not think this is a big deal, but if your first name is Greta, you probably think it’s great news.

Which gets us to the following problem: if the capacity to move tidal crude oil to market declines by more than the demand for tidal crude oil declines, then we will eventually have a shortage of crude oil carriers. Prices for moving tidal crude to market will have to rise.

In addition to the shortfall in capacity from a lack of orders, a number of ships have gone over to the grey market, carrying sanctioned Russian oil products, effectively being withdrawn from general service.

Extend this kind of industrial thinking to all the assets in the oil industry value chain and a number of eventualities become quite real.