The tanker market is set to benefit from the recovery of the global economy and trade as more oil is expected to enter the market in the coming months, reports Offshore Energy.
Demand for tankers
Easing of oil production restrictions by OPEC and depletion of world oil inventories are set to boost demand for tankers as more barrels are added to the market.
“With all of the stimulus spending, potential infrastructure spending, continued quantitative easing, strong consumer and business balance sheets and euphoria around the potential end of the pandemic, we believe that the global economy has the potential to have a robust, multi-year growth. This is good for oil and tanker demand,” Nordic American Tankers (NAT) said in a comment on market outlook.
The Suezmax owner is bullish on the outlook as it believes the set-back in oil demand is set to be followed by a forceful rebound.
The turmoil on the tanker market and shifts in demand for oil prompted by the Covid-19 pandemic have pushed NAT into a first-quarter 2021 net loss of $25 million. This compares with a net loss of $28.7 million in the fourth quarter of 2020. EBITDA came in at -$1.3 million for the first quarter 2021, compared to an EBITDA for the previous quarter of -$5.1 million.
The company, which has 25 Suzmeaxes in its fleet, including two newbuildings, expects short-term spot tanker rates to be volatile.
“The supply of tanker tonnage is inelastic in the short-term. When there are too many ships in an area, rates tend to go down. When there is scarcity of ships, rates tend to go up,” NAT said.
‘Rebound in global oil demand’
The world’s Suezmax fleet counted 546 vessels at March 31, 2021, with 13 conventional Suezmax vessels added during the quarter and 9 remaining to be delivered for the rest of 2021.
Around 26 conventional Suezmax tankers are set for delivery in 2022, and 3 for delivery from the shipyards in 2023.
Global energy demand is set to increase by 4.6% in 2021 – led by emerging markets and developing economies – pushing it above its 2019 level, a recent report from the International Energy Agency (IEA) shows.
Demand for all fossil fuels is on course to grow significantly in 2021, with both coal and gas set to rise above their 2019 levels.
The improving economic environment around the world is expected to bring a rebound in global oil demand of 5.4 mb/d, or 6% above 2020 levels. Despite the rebound, demand across 2021 is expected to remain 3.2% below 2019 levels.
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Source: Offshore Energy
