Shares of tanker owners stayed on a relatively even keel on Monday as news of the new Covid-19 variant Omicron continued to dominate headlines.

South Africa reported the new strain's emergence to the World Health Organisation on Wednesday, causing New York shipping shares to tumble on Friday.

Tanker stocks remained stable on Monday for the most part, despite news reports of countries instituting travel bans to prevent the variant from spreading.

The risk of that happening, however, is causing anxiety in the tanker sector that could eventually lead to sell-offs, Jefferiers analyst Randy Giveans said.

"This could further delay the rebound in tankers if economies shut again via new lockdowns, which would negatively impact demand for crude and refined products," he told TradeWinds.

Omicron jitters should not affect dry bulk shipping shares that much and they may even boost container ship shares by encouraging consumer spending during lockdown, he said.

Overreaction

"All that being said, there clearly was an overreaction in the equities as seen in the sell-off on Friday," he said.

"It was a lot easier for portfolio managers to sell while eating Thanksgiving leftovers than buy. Now for today, cooler heads are prevailing as seen with the share price gains for most of shipping as well as a rebound in the price of crude."

About 30 countries have issued travel restrictions as of Monday as the World Health Organisation warned that Omicron poses a "very high" global risk with "severe consequences".

Jefferies analyst Randy Giveans chalked up Friday's major sell-off to an overreaction to Omicron. Photo: Contributed

But only 10 out of 26 tanker equities monitored by TradeWinds Markets fell slightly by mid-afternoon on Monday.

Shares of New York-listed KNOT Offshore Partners, the Gary Chapman-led owner of 16 shuttle tankers, took the biggest hit, declining 4% to $16.17.

Shares of Concordia Maritime, a Stockholm-listed owner of 10 product tankers, saw the biggest gain, with a 4.3% jump to SEK 5.86 ($0.59).

"As we have seen a number of times, a rise in travel restrictions and quarantining is not good for oil consumption and tanker demand," Stifel analyst Ben Nolan wrote in a client note.

"There is no silver lining or sugar coating."

He said dry bulk and gas shipping equities have been impacted the least, but even those markets have not proven full immunity to Covid-19's downward pressure on stocks.

"Hopefully, this will be no more than another small bump in the process," he wrote.

"We saw new restrictions already in the Port of Dalian this week as well as increased travel lockdowns in Europe. Conversely, with subsidies fading, there could be the more negative economic impact on consumption, which is not good for anyone."

Opec's possible impact

Opec possibly withholding oil production amid the new variant may also pose a risk to the tanker sector, according to Clarksons Platou Securities.

"All in all, the current situation points to some delays ahead for a tanker sector recovery," the investment bank said in a note.

"We remain positive on our outlook, with the keyword being 'when', not 'if', in terms of a market reversal."

The dry bulk, container ship, gas carrier and cruise sectors performed well on Monday, with eight out of almost 50 equities seeing minor declines.

Oslo-listed shares of Norwegian bulker owner Wilson experienced the biggest jump on Monday, climbing 11.9% to close at NOK 36.50 ($4.03).

BW LPG, whose shares are also listed in Norway, saw a 5.2% drop to NOK 44.64.