SINGAPORE, Sept 29 (Reuters) – The global oil tanker market faces another year of low earnings as the coronavirus pandemic and vaccine inequalities disrupt demand and producers limit output of crude, a shipping analyst said on Wednesday.
The earnings of very large crude carriers (VLCCs) that carry the bulk of crude stand at about $10,000 a day, down from 2020 record highs of more than $240,000, after the pandemic battered demand, creating an oil surplus and a scramble for storage. read more
Despite a patchy recovery in global oil demand and some easing of output cuts, tanker shipping rates still have a way to go, analysts said.
“We need to look towards another 12 months of fairly low earnings,” Peter Sand, chief shipping analyst at shipowner association BIMCO, told the annual Platts APPEC 2021 conference.
“Most likely, in the loss-making region, meaning that VLCC will make less than $25,000 a day on average for the next year or so.”
New virus variants and outbreaks in regions crucial to oil demand growth limit tanker demand growth, he added.
“We need to see the pandemic under control before we can really see a solid recovery stage.”
While tanker rates for refined fuels have “seen slightly better days … it remains also a fact that the oil product tanker market is also under siege,” Sand added.
Although demand for refined fuels such as gasoil and gasoline has recovered in the first half of 2021 from the corresponding period last year, demand for jet fuel remains stubbornly weak.
“Jet fuel demand has actually declined, even from the first half of 2020 further down, and that’s the one product that’s still declining as we move ahead,” said Sand, citing BIMCO and Tradeviews data.
The APPEC conference is being held in a hybrid format of in-person and online segments this year.