The oil tanker industry is facing challenges due to a shortage of new ships entering the fleet, with only two new supertankers expected in 2024, the lowest in almost four decades and 90% below the yearly average.
According to Bloomberg, attacks by Houthi rebels in the southern Red Sea have led to widespread diversions in global petroleum trades, causing spikes in shipping rates and longer voyage durations. The situation is exacerbated by an aging fleet, a historically low order book, and increased avoidance of the Red Sea by tanker owners.
Furthermore, rates had been held in check last year as OPEC and its allies kept oil off the market. At the same time, a wider energy transition is meant do away with fossil fuels — dimming the industry’s outlook in the longer term, Bloomberg adds. But increased avoidance of the southern Red Sea is adding to the duration of trades that had already become elongated due to Russia’s war in Ukraine.
Oil deliveries have generally become more long-distance since a reshuffling of global oil flows following Russia’s invasion of Ukraine. Shipments to Europe that would previously hop a few days across the Baltic Sea are now taking weeks to get to other parts of the world, Bloomberg notes.
