Tanker market benefits from increased demand per ton-mile

a Market structural transformation in the tanker market, can lead to long-term effects in mileage demand, helping freight rates to maintain a higher level. In its latest market outlook, shipowner Tekai Tankers noted that “spot prices for crude oil tankers rose during the second quarter of 2022 to the highest level in two years. The increase is largely due to the ongoing trade route disruptions and long voyages resulting from the Russian invasion of Ukraine, Besides basic tanker supply and demand fundamentals.The increase in demand for mile-weight tankers due to Russia’s invasion of Ukraine has proven to be permanent.Russian short-haul crude oil exports to Europe have declined significantly in recent months, with Russian crude oil increasingly diverted to eastern destinations. Suez, especially to India and China, which increases demand for ton-mile tankers.In turn, Europe has to replace short-range Russian barrels with imports from other regions, most notably from the American Gulf, Latin America, West Africa and the Middle East, which also leads to one mile growth.These changes mainly benefit the mid-sized segments due to the respective loading and unloading areas.Moreover, these changes are likely to be long lasting The European Union plans to phase out all seaborne Russian crude oil imports by the end of 2022.”

“Looking forward, an increase in oil demand is expected in the medium term, with the International Energy Agency forecasting growth of 1.7 million barrels per day in 2022 and an additional growth of 2.1 million barrels per day in 2023, although From high oil prices and concerns about the health of the global economy.This growth is expected to be driven by non-OECD countries especially China.While strict lockdowns limited Chinese demand for oil for most of the past year, there have been some restrictions Oil imports have been reduced in recent weeks, with any significant or sustained move in this direction likely to necessitate an increase in China’s oil imports.Also, global oil supply is rising, driven by both OPEC and non-OPEC sources, with the International Energy Agency forecasting an increase of 1.8 million barrels per day. in global oil production between June and December 2022. However, it remains to be seen how Russian oil is presented and exports will be affected once the EU ban on imports of Russian crude oil comes into effect at the end of 2022. In addition, there are concerns surrounding the health of the global economy due to rising interest rates and inflation, and the potential for further lockdowns due to the coronavirus. In China, major areas of uncertainty in the coming months.”

The shipowner added, “The outlook for tanker fleet supply remains very positive driven by historically low levels of new tanker orders, a rapidly shrinking order book, and an aging tanker fleet. Only 2.1 million heavyweight tons (MDWT) tanker orders were placed in the first half of the year. 2022, which is the lowest 6-month total since Clarkson began reporting data in 1996. Moreover, most of that order has been smaller tankers, with no VLCC or Suezmax orders since June 2021 and only a few ordering of Aframaxes The company expects the level of new tanker orders to remain low in the near term due to higher prices for new buildings, a shortage of yard space until the end of 2025 due to record levels of container and LNG tanker orders, and continuing uncertainty about vessel technology as the order book diminishes. As fleet aging, the company expects minimal global fleet growth in 2023 and negative fleet growth in 2024 and 2025 as removals are expected to outpace new deliveries in the future. for the global fleet.

In summary, recent months have seen a marked rise in average spot rates year on year and a return to carrier market volatility driven by changing trade patterns and long-haul flight distances in the mid-sized segments; The company expects this volatility to continue in the near term. Looking ahead, tanker supply and demand fundamentals currently look very positive, with the best fleet supply fundamentals seen in more than 25 years and steady growth in demand as global oil consumption continues to recover from the COVID-19 pandemic.”
Nikos Rosanoglu, Hellenic Shipping News Worldwide