Weak oil demand to keep crude tanker rates down

The US Energy Information Administration (EIA) said Wednesday that crude oil tanker rates — the lowest since 2003 on the major route from the Arabian Gulf to Asia in September — have been the lowest since 2003.

Earlier this year, between March and May, crude oil tanker rates skyrocketed as refiners raced to shut down cheap oil cargo when prices plummeted in the teens, while the epidemic fueled. Demand for temporary storage rose amid demand.

In the brief Saudi-Russian price war in March and early April, the Supertaker owners were the winners, as Spat coincided with the start of lockdowns in major economies and increased global oil flaring. Shipping companies had a field day with Saudi Aramco booking tankers that filled the market with oil, while merchants turned to charter temporary tankers to later sell at higher prices.

According to EIA estimates based on Bloomberg data, tanker rates for one of the major global tanker routes — the Arabian Gulf in Japan — were the highest since at least 2000 in mid-March, except for tanker rates in October 2018 For a brief spike in. This is a result of US restrictions on Chinese shipping firm COSCO.

The tanker industry faces several challenging months, the world’s largest international shipping association BIMCO said in an analysis in early September.

Peter Sand, chief shipping analyst at BIMCO, wrote, “Low aviation and transport demand and consumption of fundamental oil will harm the industry for at least 15 months.” ”

“For the remainder of this year, the tanker shipping industry will pay for the highs that have reached the second quarter. At that time the high demand for shipping was not due to high consumption, but was being brought forward due to future demand as importers sought to leverage at lower prices, ”said Sand.

By Charles Kennedy for Oilprice.com

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