Though seasonal demand for coal and crude oil is norm, outlook remains unclear
Last April when India battled a colossal COVID-19 outbreak, many tankers were left idling, if not waiting to discharge. The tanker market to date has not recovered, leaving players worried if the recovery will happen only in 2022.
A complicated year-end to anticipate
Allied Shipbroking in their latest findings alerted of an impending soft recovery (if any), as the pandemic’s impact on the tanker market has yet to stabilise. Analyst, Yiannis Vamvakas, noted: “Demand in Q3 21 has improved compared to the same period in 2020. The upsurge is however not sufficient to improve freight revenue from the oversupply in the earlier months.”
Allied added Saudi Arabia’s call to cut oil prices for Asia likely confirms the concerns for a weaker- than-expected recovery in Asia’s demand for Q4 21. China’s latest data presented grimmer findings – a 2.5 per cent import declines m-o-m in August 2021. Naturally, the reason behind this drop is the Delta variant making its rounds globally, which thwarted oil consumption.
However, Europe showed signs of recovery with a rebound and an interest in crude oil. Allied’s findings indicated imports into Northwestern Europe are estimated to have increased by more than 20 million tonnes in August, while the gradual rebound is expected to resume in Q4 21. Unfortunately, the United States is still trying to recover from hurricane Ida – resulting in crude oil supply interruption of up to 88 per cent.
Caution remains for supply
The Organization of the Petroleum Exporting Countries (OPEC) said in a recent statement, “While the effects of the pandemic continue to cast some uncertainty, market fundamentals have strengthened and OECD stocks continue to fall as the recovery accelerates.” OPEC+ experts revised the 2022 oil demand growth forecast to 4.2 million bpd, up from a previous 3.28 million bpd, potentially building the case for higher output in future.
The 2022 outlook looks optimistic based on 2021 data. OPEC+ expects demand to grow by 5.95 million bpd after a record drop of about 9 million bpd in 2020 due to the pandemic. However, demand only rose by some 3 million bpd in H1 21.
Marine Online Media Team
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