Tanker market optimistic despite 20 year lows
In its latest weekly report, shipbroker Gibson said: “The first half of last year may have seen extreme fluctuations as a result of COVID-19 and the oil price war, with the past six months being rather unassuming in comparison.
“Nonetheless, 1H2021 witnessed rates and earnings on some trades at lows not seen over the past twenty years. This extreme weakness has certainly given the tanker market some hope to be optimistic that the worst is now behind us.
“The industry is now much better positioned than at the start of the year, given the successful rollout of vaccines across the developed world and the demand recovery that accompanied it, although rates still remain abysmal.”
According to Gibson, “in terms of consumption, in June the IEA estimated that 2021 oil demand will increase by 5.4 mbpd and data suggests that seaborne volumes of crude have increased in recent months.
“Product demand is also expected to improve as Covid restrictions are eased globally, although this could be uneven amid shifting patterns of consumption both due to the pandemic and the energy transition. Likewise, this improved demand could yet be held back by slower vaccination rates in Asia and the developing world, prolonging movement controls.”
The shipbroker added that the crude tanker market has suffered over the past six months, with typical freight volatility in winter months being a rare event. TD3C struggled to gain ground and hovered in the low-mid 30s, which reflected in dismal VLCC earnings.
Suezmaxes performed in a similar fashion, although they had a brief rally off the back of the short-lived Suez Canal blockage in late March. Aframaxes too have experienced some volatility due to extreme weather conditions in north west Europe, Mediterranean and the US Gulf but generally earnings have remained in line with the broader tanker market. Owners will be hoping for a change in fortunes moving into the second half of 2021.
For more information visit www.gibsons.co.uk
19th July 2021
