Following BIMCO's 2020 forecast revision, Peter Sand, BIMCO's Chief Shipping Analyst, states that the medium-term outlook remains gloomy.

Peter Sand highlighted that

The outbreak of the coronavirus has impaired major economies around the world and slowed down demand for oil products. The oil price war is temporarily offsetting this slowdown of crude oil tanker demand, but this will only underpin the market for so long, and the outlook is not shaping up positively in the medium-term.

Time charters are experienced a rise from the lows in 2018, until geopolitics kicked in during September 2019, which inflated rates into extremely profitable territory. Although they remained high during 2018's Q4, they fell as they were not backed up by market fundamentals and the transitory effects evaporated.

This is once again the case with the breakdown of the OPEC+ alliance lifting rates despite otherwise poor market fundamentals i.e. fleet overcapacity.

Freight rates are not expected to remain elevated for the rest of 2020 and shipowners are therefore keen to fix their ships at current rates. While most of the crude oil transports are fixed in the volatile spot freight market, the 1-year TC market is more stable and serves as a proxy for the medium-term outlook. However, given the nature of the spike,

Following oil prices, the prices for low-sulphur bunker fuels are along the same trajectory. The narrowed low-sulphur to high-sulphur spread has diminished the upside of a scrubber. The premium for a scrubber-fitted VLCC on a 1-year TC has been cut in half from USD 10,000 per day on 10 January to USD 5,000 per day on 27 March 2020..

In the meantime, the increased output from Saudi Arabia in April is set to flood the market with crude oil at a time when there is no such need on the consumption side, which consequentially will lead to the build-up of inventory.

We are heading for a period of massive supply-demand imbalance, where the oil supply is high, but major economies are in lockdown. With land-based oil storage potentially approaching full capacity fast, it is limited how much additional oil can be imported. Risk-loving oil traders may look to time charter VLCCs for floating storage. Such actions will extent the time of elevated freight rates

... Peter Sand noted.

He concluded that in recent years, the oil tanker market has been driven by external factors, while the crude oil tanker market has yet to feel the same pain, thanks to the massive fall in oil prices, reflecting yet another external factor.