Patience Please! Rebalancing Takes Time
*New Industry Note*
Our review of the VLCC fundamental outlook for our Mid-Year Update publication showed that the crude and residual fuel oil transportation market will remain structurally over-supplied in 2019 with commensurate weakness in VLCC (and other DPP segments) freight and earnings before re-balancing thereafter. In this note, we highlight the reasoning for our 2019 view in the context of historical observations.
The Middle East Cleans Up
The Middle East stands as the largest crude export region in the world with about 20 million b/d of outflows annually; however, what is perhaps less realized is its growth potential as a clean product export region. We are beginning to see a fundamental change in the Middle East petroleum industry, with initiatives from government entities to diversify away from reliance on upstream revenues and towards a wider scope of product exports.
2018 Mid-Year Update
- Global Economic Outlook
- Oil Supply and Demand Outlook
- Tanker Tonnage Demand and Supply
- Tanker Market Technicals
- Asset Market Review and Outlook
- Year-to-Date 2018 Market Activity
- McQuilling Forecast Performance
- Short-Term Outlook 2H 2018
- 2018-2022 Outlook Update
- Analytical Appendix
*New McQ TV Available*
McQuilling Services shares views on the recent development of the OPEC/non-OPEC Production Agreement in the context of upcoming US sanctions on Iran. Global trade flows to the East are likely to adapt to the new geopolitical environment as Iran volumes are replaced by producers in the Middle East and the Atlantic Basin. From at vessel supply perspective, we are likely to see an impact from increased Iranian floating sotrage nextr year.