Before making any predictions for the tanker shipping trends in 2023, it is instructive to look back at the predictions made for 2022, reports Riviera.
How wrong are we?
As McQuilling Services commercial director Stefanos Kazantzis said at the Tanker Shipping & Trade Conference, Awards & Exhibition 2022 in Athens, “As analysts, our job is to be wrong. That is the fundamental principle of analytics. But the question is, how wrong are we?”
How wrong were the predictions made at the end of 2021 for the tanker sector in 2022?
Freight rates and earnings were predicted to improve – this is a trend rehashed every year – and for 2022 the prediction was predicated on seasonality and the low orderbook. There was no prediction that earnings would soar from the average of US$14,000 per day (time charter equivalent) for VLCCs in 2021 to the current average for 2022 of US$42,000 per day.
This change in fortunes is very much down to the disruption of the tanker trades brought about by Russia’s invasion of Ukraine in February 2022 and the subsequent imposition of sanctions and the West’s attempt to limit Russia earnings from its energy exports.
There is no indication of the war ending soon, and this trend of firm tanker earnings looks sustainable in 2023 but the outright ban on Russian oil product imports into the EU from 5 February 2023 will have an impact, along with the 5 December 2022 price cap on Russian oil.
In response, the dark fleet of tankers with no identifiable ultimate beneficial owner is likely to grow in size in 2023 as Russia seeks to use proxies to export energy.
From 1 December 2022, Turkey has been conducting detailed checks on the insurance of tankers and oil cargoes seeking to transit its waters – this kind of direct action from littoral states to protect home waters is likely to continue in 2023.
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