High energy prices, aggressive interest rate hikes, and uncertainties in the Russia-Ukraine conflict are expected to result in slow economic growth, impacting the global shipping industry, and particularly the tanker market, reports Riviera.
In the latest VesselsValue Shipping Market Outlook – End Q3 2023 Forecast Values it is predicted slow economic growth in Western economies.
Monetary policies
This economic slowdown, coupled with inflation and the implementation of tightening monetary policies, is likely to affect consumer sentiment and investment spending. Furthermore, it is difficult to anticipate the duration and ramifications of the ongoing Russia-Ukraine conflict.
Specifically focusing on the tanker segment, VesselsValue indicates Russian exports of crude oil and products are expected to decline. However, this decrease in Russian supplies is anticipated to be offset by sourcing from alternative suppliers such as the Middle East Gulf, the United States and Latin America.
Tanker market
While the overall tanker market has experienced a slight increase in new building activity, the number of orders placed over the past two years has remained relatively low. Combined with expectations of a modest increase in scrapping activity, this has helped maintain a healthy market balance.
Greenhouse gas emission
VesselsValue noted that the International Maritime Organization’s enforcement of greenhouse gas emissions targets in 2023 is expected to impact fleet efficiency. As companies strive to meet these targets, fleet trading capacity is expected to be affected, offering potential benefits from 2023 onwards.
Looking ahead, the market’s outlook for tonne-mile demand remains positive, assuming oil demand is not significantly affected by the ongoing high oil prices and inflation in Western economies.
To summarise the report, VesselsValue believes the shipping market faces challenges stemming from slow economic growth, geopolitical uncertainties and volatile oil prices. However, the industry also holds potential for growth, with opportunities for tanker rates and fleet efficiency improvements on the horizon.
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Source : Riviera
