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Crude oil tanker market to remain healthy past 2030

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The International Energy Agency (IEA) in its latest report Oil 2024, suggests world demand for oil will peak in 2029 at 105.6m barrels per day and start its decline thereafter, something that has got analysts discussing what this means for crude oil tanker markets.

According to UK shipbroker Gibson “firstly, for the crude tanker sector, although peak demand is in sight, the overall volume of cargo which will need to be shipped is still large. This combined with an ageing fleet, stricter environmental regulations and a large pool of vessels engaged in sanctioned trades mean that the global crude market is likely to remain healthy past 2030. Rising Atlantic crude supply combined a growing structural crude supply deficit in Asia will see higher West/East crude flows. This should result in a continued expansion in crude tonne miles into the next decade.”

(Credit: Gibson)

For the product tanker market, the London-headquartered shipbroker said the outlook may be more challenging as road fuel demand eases by the end of the decade and more demand is centered in the East, closer the anticipated domestically orientated refining capacity.

Specialised product and chemical tankers will be boosted by a switch to greener fuels.

“Likewise, the shift in demand from conventional refined products to biofuels, petrochemical feedstocks and NGLs will result in new opportunities for specialized and chemical tankers as well as the gas carrier fleets. For both crude and product tankers, this period will undoubtedly result in some readjustment, but fleet supply fundamentals should be able to offset these changing patterns or in the case of the crude sector, likely provide a stable source of support beyond 2030. However, it is important to note that this is just one view while others such as OPEC and other forecasting agencies are taking a more bullish view about when oil demand will peak”, Gibson predicted.

Rival broker Poten & Partners in its latest weekly report said that if the IEA predictions come to fruition, crude tankers that are being ordered now should be seen as replacement tonnage rather than growth capacity.