Will tonne-mile demand support tanker rates?

The increased demand for tonne-mile shipments from these suppliers is expected to support tanker rates in the future.

While the overall tanker market has experienced a slight increase in newbuilding 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.

Currently, the orderbook stands at a mere 5% of the total fleet and saw a slight increase during the third quarter.

VesselsValue noted that 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.

Furthermore, the easing of China’s strict zero-Covid policy is expected to restore its position as a leading driver of oil demand, providing additional support to tanker markets.

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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