The first half of 2017 provided the crude sector with important earnings. The same can not be said for tanker owners, who suffered heavily, the first half of 2017. 2018 is not expected to be different for the tanker sector, as it will be challenging.
2018 is expected to be the busiest year, since 2010, in terms of supply, as 40 million dwt of crude and product tankers will be delivered. Last year, 35.5 million dwt were delivered. However, the volume of tonnage will be probably reduced, as delays are expected, a Gibson report notes.
Moreover, in 2017 slippage in the crude sector decreased when compared to 2016. Albeit this, the delays in deliveries were significantly higher.
As far as oil demand is concerned, the IEA predicts that it will grow 1.3 million b/d, which is slower than recent years, but still above long-term averages.
However, OPEC is forecast to limit output until the end of 2018, reducing export growth from the Middle East and perhaps West Africa. Namely, US will remain a focus point, with EIA expecting crude production to average 775,000 b/d higher in 2018.
Finally, clean market will not be worse than last year. Specifically, in the West, the year started well, with oil products demand looking good.
Furthermore, refined product stocks reduced in Europe and the US Atlantic Coast region. In contrast, higher diesel exports will be noted in the Baltic, with demand from Latin America and West Africa still being uncertain.
The situation is also unclear in the East, because few refining developments are expected to occur in 2018, whilst repairs at Ruwais will be finished in 2019, the report said. Additionally, China’s product exports may increase, supporting regional tanker demand.