- The ongoing crisis in the Red Sea is causing a notable impact on the shipping industry, particularly in the market for product tankers, according to G Shivakumar, Executive Director and CFO of Great Eastern Shipping.
- Tensions in the Red Sea have led to a significant rerouting of refined product trade, with vessels now circumventing the Cape of Good Hope, doubling travel time.
- This shift has increased the demand for more ships, resulting in a tighter market.
- While product tanker rates have surged, crude tankers have experienced a slight dip, down by 20% compared to the same period last year.
Red Sea Crisis Alters Shipping Routes
Ongoing tensions in the Red Sea have prompted a shift in shipping routes, particularly affecting the trade of refined products. A substantial portion of Middle East-to-Europe trade has been rerouted around the Cape of Good Hope, leading to a longer travel time and a subsequent increase in demand for shipping vessels.
Product Tanker Rates Surge, Crude Tankers Experience Dip
The impact of the Red Sea crisis has resulted in a significant surge in rates for product tankers, outperforming the previous quarter and the corresponding period from the previous year. In contrast, crude tankers have seen a slight dip, with rates 20% lower than the same period last year.
Unforeseen Strength in Dry Bulk Sector
Despite the challenges posed by the Red Sea crisis, the dry bulk sector has shown unexpected strength in the first quarter. Larger ships, in particular, have demonstrated stronger rates compared to the same quarter last year, defying historical expectations of weakness during this period.
Did you subscribe to our daily Newsletter?
It’s Free! Click here to Subscribe
Source: CNBCTV18
