Maritime Strategies International (MSI) managing director Dr Adam Kent sees a slew of changes that will impact the tanker market in 2019 and beyond, and not all are connected with the IMO 2020 sulphur cap.
The US is “winning the tug of war” on oil production between OPEC, the Middle East, the US and the Americas, he told delegates at the 10th Marine Money London Forum.
US crude oil production growth is outweighing Middle Eastern growth (and cut-backs) and looking at the source of crude oil exports, MSI projects that by 2022 the growth in US and the Americas crude oil production will account for 28% of global exports.
This will be a boost to tonne-mile demand and the tanker market as a whole, but the location of the refineries is also crucial, according to Dr Kent.
This year will be a record year for new refineries, mostly in the Middle East, southeast Asia and India – a boom for tonne-mile demand for product tankers.
MSI covers all the main shipping sectors and Dr Kent asked analysts to produce a SWOT analysis (strengths and weaknesses, opportunities and threats) to their respective markets. The one consistent threat to the continued recovery across all shipping sectors was policy.
“Policy is now one of the issues that the industry has to deal with that could dislocate momentum on the upward path of the cycle,” he said.
Policy in the tanker sector includes OPEC actions and in the longer term, the impact of environmental policies.
MSI has analysed a range of outcomes based on decarbonisation in shipping and globally. On the tanker side, an admittedly extreme scenario sees the overall trade by 2035 at only 90% of the level of trade in 2010.
Is policy the greatest threat to the tanker market? Have your say at the Asian Tanker Conference in February in Singapore.