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Emerging CPP Trades in South America

July 30, 2021

In previous weekly highlight sections, we have demonstrated a strong correlation between crude/oil product balances and import/export tanker demand for each region.  This analysis has enabled us to identify emerging trends regard to future cargo flows as well as changes on tanker demand.  For this week, we are looking at possible strengthening CPP trades for the South American region, both east and west coasts.

The East Coast South America market is expected to see strong recovery in gasoil/diesel demand throughout the next five years, increasing about 120,000 b/d (Figure 1) for the period.  In the ...

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LR2 Floating Storages Fully Unwind

July 23, 2021

As we projected in the 2021 Tanker Market Outlook published back in January, the CPP market continues to outperform the DPP market in the 1H of the year and is expected to grow further for the rest of the year.  Although the oil product demand is recovering at a much faster pace than crude demand, the CPP tanker market benefited significantly from the support on the tonnage supply side – one of them being the fast unwinding of floating storages.

Due to the Price War and global Pandemic, both crude and oil product (including gasoline and jet) prices went into steep ...

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Updated VLCC Demand/Supply Outlook

July 16, 2021

The discussion on the tanker markets is gaining “heat” as we move towards the second half of the year with some analysts expecting a quick, spectacular recovery, while others including ourselves, observing a more tempered outlook.  A recent refresh of our supply/demand models for the short-term continues to project a healthy demand-side recovery from increasing crude length in key regions (Middle East, West Africa); however, the existing overhang and continued rise in vessel supply, may effectively wipe out the demand gains, should owners continue to forego vessel retirements.

To visualize these fundamental developments, we graphed our expected increase in ...

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OPEC+ Indecision and the Impact for Crude Tankers

July 9, 2021

The current “spat” between de-facto OPEC leader Saudi Arabia and the UAE almost feels inevitable in hindsight.  The UAE has strategically set out a plan to diversify the country’s economic profile, most notably through the development of commercial centers in Dubai and Abu Dhabi, with the former a major hub for financial services industries as well as tourism.  At the same time, the UAE has invested in increasing its crude production capacity to around 4.0 million b/d, coinciding with the introduction of Murban crude to the broader financial trading system.

In short, the UAE is asking for ...

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The Effect of the Dangote Refinery

July 2, 2021

The Dangote refinery is currently being built in Nigeria, with the government of the country recently making the news with an additional stake purchase in the project.  Since its inception it has been a project criticized by many regarding its progress, with many analysts believing that it will never be completed.  What we know so far though is that construction continues, even if at a slower pace due to covid and other factors, and that it is likely for the huge plant to partially come online sometime in 2022.  At least close to 380,000 b/d of refining capacity ...

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