Ports & Shipping

*Trends in the tanker market

International Experts revealed that the crude oil tanker market is currently suffering from a very depressed condition with an abundance of tonnage. Owner groups have been losing money for a long time and some firms are on the brink of bankruptcy. Significant deliveries of crude tankers during 2012 may depress rates more. Scrapping can only partly ease the problems in this market. The growth in demand will predominantly come from non-OECD countries. The product tanker market is also struggling with oversupply and is subject to continuous alters in import needs and trade patterns. The reduction in trans-Atlantic trade because of lower consumption is noticeable. However, while the current order book for product tankers is limited, some owners hope this market will pick up sooner than the crude tanker market. Moreover, the demand for LNG is on the increase, new LNG plants are being constructed in various countries and LNG carriers are enjoying very high rates because of the surge in consumption, resulting in an optimistic viewpoint for the LNG ship segment. The LNG market is dependent on developments in the gas price and on environmental pressure to use cleaner fossil fuel.

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The Experts are likely to see continued growth in demand in this market, particularly from 2015-2020, and even more so beyond 2020. Based on this, experts expect a rapid expansion of LNG bunkering networks. By 2020, oil imports to China and India are probable to have increased compared to 2012 levels. The supply would come mainly from the Middle East, Africa and Russia, and also by pipeline. Substantially higher oil production levels from offshore Brazil are predicted. Presently, Brazil’s offshore production is 2 million barrels per day (mbd). This is predicted to rise to 4 mbd by 2017 and 5 mbd by 2020. Meanwhile, US crude imports would focus on shorter hauls, largely from South America. Tanker owners have experienced strong pressure from oil majors for many years, also vetting schemes with respect to the quality and integrity of vessels, and this trend is predicted to continue. In part, this is because of the fact that oil companies usually have very high technical and operational standards for oil tankers. Additionally, it is also revealed that as bunker prices remain high, the unit transport cost is a driver for fuel efficiency, as in all shipping markets. Provided the scrapping rate picks up and demand for crude tanker capacity follows the growth in Chinese demand and in the number of oil supply sources, experts may predict the market to be in balance well before 2020.