BIMCO Analysis: Longer Routes & Higher Rates As EU Bans Russian Oil

September 13, 2022

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BIMCO’s Chief Shipping Analyst, Niels Rasmussen, gives his insight into the market in September 2022.

Highlights

So far this year, The Baltic Exchange Dirty Tanker Index (BDTI) has on average been 86% higher than during 2021 and The Baltic Exchange Clean Tanker Index (BCTI) has on average been 113% higher.
The IMF has lowered its global economic growth forecast to 3.2% for 2022 and 2.9% for 2023, and highlights that the risk of a global recession has increased.
Year-to-date dirty tanker tonne miles have on average been 5.1% higher than the 2021 full-year average, whereas clean tanker tonne miles are up 2.9%.
We estimate demand growth to approach 5% in 2022 and 2023 for both markets. Solid production and consumption increase drive 2022, while increased sailing distances due to the EU’s ban on Russian oil and oil products will provide most support in 2023.
Contracting has remained low, and the order book has reduced to 4.7% and 5.4% of the crude and product tanker fleet sizes respectively.
The crude fleet is expected to grow by 5.4% in 2022 and by 1.7% in 2023, whereas product tanker fleet growth is forecast at only 1.0% in 2022 and 0.9% in 2023. Capacity supply in both segments is expected to grow slower than the fleet during 2023 and may even drop by 2-3% compared to 2022 due to reductions in sailing speed arising from EEXI, CII, and ETS implementation.
Overall, we expect further and solid improvements for both tanker markets in 2023 although headwinds for the global economy remain a risk.