HANSA 01-2019

Schifffahrt | Shipping
this fall was not driven by a significant increase
in cargo loadings, but by a stabilization
in fleet size.«
Sanctions, trade wars, OPEC cuts
Besides that, political factors seem to become
a major influence in 2019. Sanctions
prohibiting business with Iranian ports,
the country’s energy sector and purchasing
of Iranian oil and oil products came
back into force in early November. BIM-
CO sees changing trade lanes caused by
the US sanctions. »A shift away from Iran
primarily to other Middle Eastern exporters
doesn’t change trading patterns
much, as barrels will be switched with
heavy sour crude oil of a similar quality,«
BIMCO said in a recent report. Elsewhere
in the world, Libya is scaling up
production and the US has set a record
for crude oil exports to all nations other
than China for seven months in a row.
In August and September 2018, when
previous number one purchaser China
took zero US crude oil, American exporters
had to seek new buyers that were
found in the Atlantic Basin and in the
Far East. The new number one long-distance
buyer, South Korea, has helped in
keeping tonne-mile demand almost unchanged
from July 2018’s record high. In
China’s absence, Canada has emerged as
the new top buyer.
Smith expects Middle East crude production
and exports to decline in the nearterm
as Iranian sanctions bite and OPEC
cuts intensify in Q1 2019. OPEC+, the cartel
and a coalition led by Russia, plans to
reduce production by a combined 1.2 mill.
barrels per day, starting from January
2019. Some analysts think that 2019 VLCC
rates might suffer from the global production
cuts while ohers expect the impact
to remain only limited. According
to Clarksons Platou Securities, the buildup
of US pipeline capacity (2 mill. barrels
by the end of 2019) will provide long-haul
volumes form the US Gulf. In combination
with several other factors – less fleet
growth than compared to 2016 (when the
last round of cuts was decided), expected
refinery demand due to a low oil price –
this could make up for the losses. »Continued
growth in US crude exports, which
exceeded 3 mill.b/d in late November, are
adding long-haul demand,« MSI’s Tim
Smith says, supporting this view.
VesselsValue’s Court Smith has taken a
closer look at the possible impacts of the
announced OPEC production cuts. VV
believes that they will have a negative
impact on the earnings of VLCCs in the
short run, but may boost Suezmax and
Aframax demand in the medium term.
The current round of OPEC cuts was enacted
in late 2016 to put upwards pressure
on oil prices, and have been successful
at that goal. Now that prices are falling
again, cuts are back on the table. OPEC
cuts will reduce the number of VLCC
cargoes available in the Arabian Gulf,
encouraging owners to position ships in
other primary load regions such as West
Africa, Brazil, and the Caribbean.
»Looking into 2019,
much depends on
the level of demolition«
A decisive factor in 2019 will once again
be fleet growth. MSI expects the balance
between tanker supply and demand
growth in 2019 to be tight. »Demand
growth is unlikely to be exceptional, although
growth will improve on 2018,
with continued increases in crude flows
from the Americas to Asia being a key
support.« MSI views continued high
scrapping levels in 2019, comparable to
2018, as crucial for sustaining the market
improvement, suppressing supply growth
and allowing underlying market utilisation
to improve. »Lower levels of scrapping
are a risk to our forecast, whilst the
macroeconomic environment also appears
vulnerable, threatening underlying
oil demand growth,« Smith says.
BIMCO expects fleet growth for oil product
and crude oil tankers to be higher than
in 2018. »Mostly for the crude oil sector as
it swings back from very low to 2-3%. This
is the real challenge,« Sand says. For the oil
product tanker fleet, BIMCO’s 2019 fleet
growth forecast is at 2.4%, with deliveries
and demolitions both falling. According
to BIMCO, the crude oil tanker fleet
increased by 0.9% in 2018. »Looking into
2019, much depends on the level of demolition.
Following three low months of ordering
activity from June to August, September
saw owners and investors showing
a renewed interest in crude oil tanker tonnage.
The combined order for 1.7m DWT
of Suezmax (5) and Aframax (8) was the
highest since June 2017,« says Sand.
Difficult but significantly better
The recent upturn in markets corroborates
MSI’s view of 2018 as the nadir in
the market. »Although we expect the levels
of spot earnings attained in November/December
– which have been exceptional
for some sizes/markets – to recede
in Q1, overall MSI forecasts 2019 tanker
markets to improve on 2018, with earnings
significantly better on an annual average
basis,« says Tim Smith.
In contrast, Peter Sand says: »In spite
of the strong market seen since early
October for crude oil tankers, we have
seen no massive change to fundamentals.
We expect 2019 to be a difficult year
for the crude oil sector, mostly due to the
once-again-increasing fleet size – but also
due to demand not foreseen to be much
stronger than a ›normal year‹ – which is
no higher than 2%.« For the oil product
market, the development since Mid-November
has been positive, somewhat connected
to the lift in crude oil tankers. A
pick up in business arrived as refined oil
is redistributed. »Patience is the key to
success in both sectors – the second half
may bring around better rates – as seasonality
will be combined with the leadup
to the IMO2020 deadline on 1 January
2020,« Sand explains. This view is supported
by Smith: »We expect the recovery
to continue into 2020, further supported
by IMO regulations and associated higher
refining runs, sweet crude demand and
product redistribution and logistical demand.
These issues will become increasingly
important in H2 19.«
Overall, sentiment among tanker owners
is improving – in spite of many uncertainties.
According to the latest Shipping
Confidence Survey of consultancy Moore
Stephens, the number of respondents expecting
higher freight rates over the next
twelve months in the tanker market was
up by 7% on the previous survey to now
60%, while those expecting lower rates
was up from 9% to 12%. fs
HANSA International Maritime Journal – 156. Jahrgang – 2019 – Nr. 1 53