The Q2 2024 Shipping Market Overview & Outlook from BIMCO has been released which features an analysis of the tanker shipping market regarding supply and demand.
According to Niels Rasmussen, BIMCO’s Chief Shipping Analyst, for crude tanker demand they forecast to outpace supply in 2024 but grow slower than supply in 2025 as ships may return to the Suez Canal and sailing distances shorten.
Supply/demand balance
Houthis continue to attack ships in the Red Sea and the Gulf of Aden, and there is no end to the conflict in sight. We therefore base their forecasts on the assumption that rerouting of ships away from the Red Sea and the Suez Canal towards the Cape of Good Hope may impact the market throughout 2024, and that ships may first be able to return to normal routings in 2025.
We estimate that this will increase the average sailing distances in 2024 by 7% for crude tankers and 4% for product tankers.
..BIMCO stated.
Trade changes due to sanctions on Russian oil exports increased sailing distances in 2023 by 3.0% and 2.3% for crude and product tankers respectively. Combined, trade restrictions due to war and crises are therefore expected to add 10.2% to crude tanker demand in 2024 compared to 2022, matching the expansion of cargo volumes.
In the product tanker sector, longer sailing distances are, however, expected to surpass volumes as the main driver for growth. Sailing distances are estimated to add 6.4% to demand between 2022 and 2024 while volumes are expected to expand by only 2.2%.
Demand
We forecast that crude tanker cargo volumes will grow 1.0-2.0% year-on-year in both 2024 and 2025.
..BIMCO said.
The average sailing distance is predicted to increase 7% in 2024 due to ships avoiding the Red Sea and the Suez Canal but fall approximately 5.5% in 2025 as we assume that ships may be able to return to normal routings.
They therefore expect that tonne miles demand will grow 8.0-9.0% in 2024 but fall 3.5-4.5% in 2025. Product tanker cargo volumes are also forecast
to grow by 1.0-2.0% in both 2024 and 2025.
Product tanker tonne miles demand is also forecast to be impacted by changes in sailing distances. We predict that distances will increase 4.0% in 2024 and fall 5.0% in 2025. As a result, tonne miles demand is forecast to grow 5.0-6.0% in 2024 but fall 3.0-4.0% in 2025. Transits of the Suez Canal appear to have settled at a level 35-40% lower than last year for crude tankers and 45-50% lower for product tankers.
The lower number of transits of the canal have year to date contributed to the increase in the average sailing distance for both crude and product tankers compared to last year.
