Expect a spike in tanker demand in 2020, was one of the messages delivered by Braemar ACM Shipbroking’s global head of research Henry Curra at the 10th Anniversary Marine Money London Forum.
The driver behind the projected spike is an uplift in refinery runs in preparation for the IMO 2020 global sulphur cap on marine fuel.
“Oil demand stays relatively similar, but the amount of crude [oil] that needs to run through the refineries to meet the new products' demand, particularly in the bunker market, means that there will be an uplift in that year  and probably that year alone,” Mr Curra explained.
In the shorter term, he expects a weaker Q2 2019 driven by intense refinery maintenance which will include refurbishment for the new compliant marine fuels in 2020.
But Braemar ACM Shipbroking is expecting a rebound later in Q4 2019 with VLCC rates increasing significantly compared to Q4 2018.
Despite this bullish short-term outlook, he was cautious about ordering VLCC newbuildings.
He also noted that “newbuilding prices are well off the floor” in that two years ago shipyards were offering US$90M for a dual-fuel VLCC. Today the pricing of a single-fuel VLCC newbuilding is in the region of US$93M.
This makes ordering VLCCs less attractive and he noted there is also little premium for prompt delivery as shown by the flat secondhand prices in the last few months.
Is now the right time to order VLCCs? Have your say at the Asian Tanker Conference in February in Singapore.