Tanker Shipping Market Analysis: February 2024 Overview & Outlook

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  • The global tanker shipping market exhibits resilience amidst challenges, with a strengthening trend despite a slowdown in oil demand growth.
  • This report, published by BIMCO, provides insights into the current market dynamics and forecasts for the coming months.

Supply/Demand Balance

For crude tankers, the report predicts a tightening supply/demand balance in 2024 and 2025, driven by low fleet growth and increased sailing distances. The product tanker sector is expected to experience a similar trend in 2024 but faces potential weakening in 2025 due to heightened ship contracting in 2023.

Impact of Red Sea Crisis

The ongoing crisis in the Red Sea, diverting shipping routes via the Cape of Good Hope, contributes to longer sailing distances. The report assumes this crisis will impact the market until the end of June 2024, affecting both crude and product tanker demands.

Fleet Growth and Capacity

While crude tanker fleet capacity is anticipated to grow modestly, with a focus on Aframax and Suezmax segments, product tanker fleet capacity is expected to see significant growth, particularly in LR2s and MRs. The report underscores the importance of asset prices, rates, and earnings, which have shown strength and are predicted to continue favorably in 2024.

Global Economic and Oil Demand Outlook

Global economic growth, estimated at 3.1% in 2023, is projected to remain steady in 2024 and 2025. The International Monetary Fund (IMF) forecasts varying growth rates across different regions. Oil demand, according to the International Energy Agency (IEA), is expected to slow, reaching around 103.7 million barrels per day in 2025.

Geopolitical Influences

Geopolitical factors continue to shape tanker trades, especially after the Russian invasion of Ukraine, resulting in sanctions on Russian oil exports. Tensions in the Red Sea and Gulf of Aden further impact shipping routes, with potential consequences for tanker demand.

Risks and Considerations

Risks to the forecast include uncertainties in inflation, interest rates, and geopolitical crises, such as the Red Sea situation. The report acknowledges potential upsides if inflation falls faster or geopolitical crises resolve more quickly than anticipated.

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Source: Bimco

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