The crude tanker market is witnessing a surge in 2024, fueled by geopolitical instability and oil supply disruptions. Recent events, such as the shutdown of Libya’s Sharara oilfield and attacks on ships in the Red Sea, have introduced uncertainty into the crude oil supply chain, leading to upward pressure on oil prices and positive developments for freight rates.
Geopolitical Unrest Driving Market Trends
The shutdown of the Sharara oilfield and ongoing attacks in the Red Sea have created a volatile environment, impacting shipping routes and increasing tonne-mile demand. The crude tanker market, influenced by sentiment and disruptions, has experienced an upward trend in rates, particularly in routes like VLCC Middle East Gulf to China and West Africa to China.
Anticipated Record Global Oil Demand in 2024
Despite global economic uncertainties, 2024 is expected to witness a surge in global oil demand, reaching over 103 million barrels per day. China’s sustained oil appetite, with an estimated 2 million barrels per day incremental demand, plays a pivotal role. The limited growth in the global tanker fleet and geopolitical uncertainties further contribute to a promising outlook for the tanker sector in 2024. The recovery from a prolonged period of staggered rates is supported by a historically low order book and favourable demand fundamentals, fostering increased spot rate volatility in the medium to long term.
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Source: breakwave advisor
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