the current, global demand for crude oil is hot and supply is extremely tight. On the one hand, due to the economic recovery after the epidemic, the demand for oil in the United States and Europe has increased significantly; on the other hand, the economic impact of the war between Russia and Ukraine and the sanctions imposed on Russia have led to changes in the pattern of world energy trade, resulting in an extreme shortage of crude oil-all over the world are snapping up oil, oil tankers are beginning to re-enter the stage, and freight rates are snowballing to enter the peak of the market.
, even some shipowners said, "this will be the best time for the product tanker to win this year."
the world's most serious "oil shortage" in Europe. During the COVID-19 blockade around the world, oil production exceeded demand, and inventories around the world were full of cheap crude oil products purchased during the trough, and have since been running on the old capital of these crude oil inventories, rather than using tankers to import new supplies (because new supplies are much more expensive than the oil purchased during the trough and still in storage).
with the gradual depletion of crude oil inventories around the world, coupled with the risk of depletion of energy supplies immediately after the Russian-Ukrainian war, inventories around the world are already at historically low levels.
among them, the "oil shortage" in Europe is the most serious. For a long time, Europe has relied on Russian natural gas, oil and other goods, and Russia's export sanctions have caused a great impact on the European energy market. Currently, retail gasoline prices are up 45% year-on-year, and diesel fuel used by truck drivers is up 75%.
Alphatanker issued a warning saying: "It is now clear that the global diesel market is tightening at an alarming rate, and supply shortages are hitting major global consumer markets."
transport oil! Transport the oil! Oil tankers return to peak. LR2 oil tankers, freight rising $17,000 per day.
product tankers benefit from local diesel shortages, high refinery profits, and large-scale trading arbitrage by fuel buyers. These arbitrage behaviors make fuel traders willing to pay higher freight rates to transport crude oil, and the revenue of product tankers has increased significantly...
✦ MR product tankers can earn $49,800 per day on the spot market, more than four times the average rate for the whole of 2021. Clarksons set the break-even ratio for such vessels at $18,000 per day.
The LR1 is earning $50,400 per day on the spot market, and the LR1 rate is almost four times the 2021 annual average, with a break-even rate of $19,000 per day for such vessels.
handling large LR2 tankers with large capacity and long-distance operations showed greater benefits. On May 6, LR2 tanker freight rates increased by 21% to US $58,600 per day.
the freight rate for the LR2 finished oil tanker sailing to the United States is up 17,000 US dollars per day!
sub-route area -
in the Middle East Gulf -- TC1 75k Middle East Gulf-Japan's LR2s rose 51.43 points to WS288.57, with a round-trip TCE slightly below US $60,000/day. TC5 55k Middle East Gulf-Japan Reaches WS307.14 (+ WS7.85); For ships sailing westward on TC8, freight rates rose by about US $300,000 to the US $4,700,000 mark.
's freight rates for routes west of Suez -- LR2s, TC15 80k Mediterranean-Japan showed encouraging signs again, increasing by US $150,000 to US $3,650,000 this week. TC16 60k Amsterdam / Offshore Lomé's LR1s looks stable after rising 22.86 points to WS219.26 ($30,401/day to and from TCE).
in the Middle East Gulf -- TC2 37k UK Mainland-US Atlantic Coast climbed 24.44 points to WS327.22;TC19 rose to WS340.71(+27.14);TC14 38k US Gulf-UK Mainland rose 46.43 points to WS237.14;TC18 MR US Gulf-Brazil Freight Rises Sharply to WS309.29 (+80);MR Atlantic TCE Rises from US $32,605 to US $42,999 per Day.
but VLCC languished. The product tanker market was good, while the VLCC sector continued to fall, with the 280000-ton Middle East Gulf-USG (through the Cape of Good Hope) freight index 1.5 points lower than last week and slightly lower than WS24.5. In the 270,000-ton Middle East Gulf-China market, freight rates fell nearly two points to WS44.7 (round-trip TCE-US $8,300 per day). In the Atlantic, shipowners are under pressure from the continued decline in demand. In the 260,000-ton West Africa-China market, prices are nearly 3 percentage points lower than a week ago and slightly lower than WS45.25 (round-trip TCE-US $6,200 per day). In the 270,000-ton US Gulf-China market, another US $425,000 was lost in freight, with the latest estimate slightly above US $5.3 million (TCE-US $8,800 per day).
refineries sped up, supporting high freight rates for tankers. Lois Zabrocky, chief executive of International Seaways, said: "The world is in desperate need of diesel, which is causing refineries to speed up and profit margins to soar."
shipbroker Gibson said in its latest weekly report, "In recent weeks, overall refining margins have soared to record levels, while tanker freight rates have also exceeded previous records, and demand for product tankers is expected to increase further in the coming months.
"In the near term, superior refining margins, combined with very low inventories and growing demand, provide a clear incentive for global refiners to refine. In the United States, Gulf refiners have historically benefited from lower energy costs and cheaper feedstocks relative to European refiners, and this remains the case, especially given European gas prices," the report said." Shipbroker Gibson said.
In addition to increased demand in Europe, regional refiners are also benefiting from strong export demand in their traditional Latin American markets, where European importers are increasing their purchases of non-Russian crude products.
crude oil from India and the Middle East will quickly flow westward to fill its position as Russian oil increasingly withdraws from European markets, and refining activity in Asia is also expected to expand.
"There is no doubt that the outlook remains uncertain, but with all the current evidence pointing to a significant increase in refining activity and product trade in the coming months, it is difficult to imagine that tanker freight rates will not fluctuate wildly."
product tanker freight by leaps and bounds, will continue for quite some time.
, some industry analysts said that it is not clear how high the rate can be and how long it will last. However, since MR transportation costs only account for about 5% of the value of crude oil cargo, the increase in the rate cannot subside the demand for crude oil. Enthusiasm. With the bottoming of crude oil inventories in various places, the chaos of crude oil flow and the continuous interference of the market, the soaring freight of refined oil tankers will continue for quite a long time.
Source: Maritime Service Network