Two large oil tankers will join the global oil transportation fleet during the current year, increasing at the slowest pace in nearly four decades, an increase that is 90% less than the annual average recorded since 2000, according to a Bloomberg report.
But as owners increasingly began to move away from the southern Red Sea, the lack of new oil transportation capacity began to take its toll. Oil transportation prices increased significantly and journey times increased, according to the report.
The Houthis are attacking ships passing through the southern Red Sea off the coast of Yemen, which they say are Israeli or heading to Israel, in an expansion of the circle of Israeli war on the Gaza Strip. The attacks have expanded to include British and American ships after the two countries began directing air strikes against the group.
Limited growth
The growth rate of crude tankers remained limited last year as OPEC and its allies maintained production restrictions last year. At the same time, the broader energy transition means eliminating fossil fuels, clouding the industry’s long-term outlook, but increasing avoidance of the southern Red Sea increases. The duration of oil transportation has already increased due to the Russian-Ukrainian war, according to Bloomberg.
The agency quoted Alexander Saveris, CEO of Euronav, a sea transport company, as saying: “The impact of transport route transformations can be seen every day in the field of shipping in general, especially tankers of crude oil and products,” and in addition to the decline in deliveries of new tankers and the aging fleet, The outlook for tankers is “very positive.”
While other commercial ships, especially container ships, began avoiding the Red Sea shortly after the attacks began in November, oil and fuel tankers were slower to do the same, according to Bloomberg.
But that changed last month, after US and British forces bombed Yemen in an attempt to stop the attacks. However, the attacks did not dissuade the Houthis, but instead led to the departure of many of the world’s largest tanker owners, according to the report.
The agency quoted Enrico Paglia, research director at Panchero Costa Shipping Services, as saying, “The situation is difficult in the tanker market, especially for crude oil tankers… and it will be more difficult in the future.”
The shortage of tankers comes with the decline in the efficiency of the global fleet for transporting oil. In addition to many ships sailing through the Cape of Good Hope route instead of the Red Sea and the Suez Canal, the boom in the business of the dark transport fleet – which hides by disabling the automatic identification system of ships, or adopts practices… Deceptive shipping – means that many ships are only available to specific customers.
Shipping is known for its fluctuations. In 2020, when oil traders were storing it inside tankers at sea, the average tanker revenue increased to about $100,000 per day, before subsequent production cuts from the OPEC Plus alliance led to a decline for several subsequent years, but now. There are many factors supporting tanker returns.
Change the substrates
Ship employment rates — a measure of how much a tanker fleet is in use at any given time — have increased by as much as 5% since ships began avoiding the Red Sea, Bloomberg reported, citing Fotios Katsoulas, principal tanker shipping analyst at Standard & Poor’s Global.
He added that the situation in the Red Sea “is changing the fundamentals of the market and is working in favor of ship operators…morale is much better now.”
After the two large tankers entered service this year, only 5 tankers are scheduled to be delivered in 2025, according to data from Banchero Costa Shipping Services, compared to 42 ships delivered in 2022.
