Tankers Supply Demand

TANKERS

Tanker rates (and tanker stock prices) depend on supply and demand.

Demand depends on global oil demand and tanker miles.

Russia is exacerbating miles.

Diesel flows from far away.

EU embargo will lift demand 7X on some routes.

Refinery closures in U.S. and Europe need to be supplied by Asia and Middle East as China oil inventories drop and U.S. inventories rise.

Supply depends on tanker orders growth and demolitions.

The orderbook is very low.

Prices are high for ships.

Because shipyards are building other things.

Demolitions are about to surge.

Resulting in lower fleet growth.

Utilization rates are still low, so there is room to grow in tanker rates.

There were zero VLCC orders in 2024.

Oil tankers from Russia are mostly Greek.

But Russia exports are collapsing.

Tanker rates are rising.

The forecasts are good.

Russia oil price cap has increased demand for mid size Aframax tankers.

As Europeans are not buying Russian oil anymore.

Product tankers are in higher demand than crude oil tankers.

On 14-Dec-2022: CEO of Scorpio Tankers forecasts a 5X in tanker rates: 

Frontline tanker rates: https://app.tankersinternational.com/fixtures/id/108638

Starting from 1 Jan 2023 all ships over 5,000 GT require a Carbon Intensity Indicator CII. Those ships with a bad CII rating will have to use SEEMP to come into line, which could damage their operational abilities by having to run at slower speeds. Slower tankers means more tankers needed as global crude oil in transit rises.

Tanker rules are getting more stringent in India.

DRY BULK

Dry bulk is not doing so well as supply is higher than demand.

Grain exports are down as China population is declining.

CONTAINER SHIPS

Lots of container ship deliveries.

Still a lot of containers (update 2024)

High freight rates. 

Due to Red Sea problems.

Cycle:

Shipping companies: