In the
Suezmax fleet, there are 89 vessels of over 15 years of age (18% of the
current fleet), which is the preferred upper employment limit set by
most charterers.
However, many of the older units are able to trade in the shuttle
markets, where age is not so much of an obstacle. Today, 60% of the
current Suezmax shuttle fleet is over 15 years old, said Gibson Research
in a recent report, following up its recent analysis of the VLCC fleet
(see ‘Tanker Operator News’ 13th May).
Older conventional tankers continue to find employment East of Suez,
typically loading Middle East cargoes for India or Singapore.
Between 2014-2015, huge investment in new Suezmaxes took the orderbook
profile as a percentage of the existing fleet to 24%; the highest of all
the tanker newbuilding sectors.
Almost all of the newbuildings are scheduled to be delivered over the
next 24 months. But how are these newbuilds going to be absorbed as
there appears to be little chance of any withdrawals from the fleet?
Last May, Gibson wrote in the weekly report that “supply appears in
check, although robust earnings are likely to lead to a slowdown in
demolition activity and that the increase in the Suezmax trading fleet
is still expected to be limited”.
We were correct at the time, Gibson said, but the 49 orders placed since last May now paint a different picture.
It appears that geopolitical events have a huge influence on the
Suezmax segment, more so than other sectors of the tanker market and the
short term prospects appear to be very much under treat.
For example, the loss of West African barrels to the US (TD5) over
recent years (although recently enjoying a renaissance) has been
substituted with WAF/UKC (TD20) as the crisis in Libyan production
continues and is likely to do so for the foreseeable future.
It should be assumed that Libya will one day return to pre-crisis
levels in the same way as Iraqi production has returned. Since 2006,
Iraqi production has also supported Suezmax demand, with the largest
jump in output from 3.3 mill barrels per day seen in 2014 to 4 mill
barrels per day recorded last year, which included Kurdish exports
through Ceyhan.
However, there is a view that Iraqi production has reached a plateau
and may even decline in the short term. The loss of revenues from the
low oil price has limited the government’s ability to pay oil companies,
who in turn are not investing in Iraq’s infrastructure, which is needed
to expand crude exports.
The recent supply disruptions in Nigeria represent another threat to
the Suezmax market and again some industry experts are forecasting that
the nation’s oil output will drop sharply over the next decade.
Wood Mackenzie, the energy consultancy, has cut its output forecast for
Nigeria by more than a fifth, to 1.5 mill barrels per day on average
over the next decade, due to uncertainty over promised reforms to the
cash-strapped state oil company. This is not related to the militant
activity which is currently disrupting exports.
Nigerian production has reached a 20-year low following recent acts of
sabotage. Lost output destined for India discharge may in future have to
be sourced from the Middle East, which could support the Suezmax
market.
Meanwhile, other areas where forecast growth in cargo volumes have not
materialised as expected, such as Kozmino and the Caribbean, have taken
their toll on Suezmax demand.
The Suezmax market could face some tough challenges over the next few
years; not just from the threat of the newbuildings, Gibson concluded.
A full list of Suezmaxes and every tanker of 25,000 dwt and over can be
found in the recently published Gibson Tanker Register 2016.
This annual listing takes its usual format with the first section
devoted to commercial owners and their vessels, followed an an
alphabetical list of all of the tankers included with their basic
details.
A CD is included with the printed version, which gives more in-depth
information, such as vessels by charterer, tanker pools, vessels by dwt,
newbuildings by size group and delivery dates.
No comments:
Post a Comment