According to the maritime group Bimco, freight prices for petroleum and goods will increase quickly in 2023 and 2024, mirroring the spike in rates that occurred in 2008, when they frequently exceeded $100,000/d.
According to Bimco, demand for product tankers will increase by 4.5–5.5% in 2023 and 2-3% in 2024, while demand for crude tankers would increase faster than supply by 2.5–3.5% in both 2023 and 2024. Also, due to the EU embargoes on Russian crude and products, Europe would have to import from farther-flung locations, increasing average sailing lengths by 3–4 %. This will dramatically increase tonne-mile demand and raise spot freight rates.
According to the report, the tightening of the supply-demand equation will result in a rise in freight rates, time charter rates, and ship pricing.
Since the financial crisis of 2008, the market has not had a consistent period of strength, according to Bimco.
Increased fuel consumption
This increase will result from both the IMF’s expectation of global economic growth over the same period and the EIA’s prediction of increased liquid fuel consumption in 2023 and 2024, thanks to an improved prognosis for the Chinese economies.
According to the EIA, between 2022 and 2024, China would account for 38% of the increase in oil demand, followed by India at 18%. 15 % of the growth will come from the Middle East.
Though Bimco predicts that the fleet of oil tankers will grow by merely 0.9 % in 2023 and 1.5 % in 2024, the supply of new tankers will only have a limited impact on demand growth. Much less growth will be seen in the product tanker fleet, only 0.4 % in 2023 and 1.1 % in 2024.
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Source: Argus Media