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VLCC Fleet Development Overview

March 25, 2022

The cumulative net fleet growth for VLCCs in 2022 is forecasted to reach 36 vessels after the latest data revisions.  By end of February, we have estimated that another eight VLCCs have returned to trading from floating storage, with the balance now at pre-pandemic levels.  This has added more pressure on rates especially since the current market conditions of steep crude contango remove any incentives to store crude for economic gains.

We expect March to be a month of heavy delivery schedules, with ten VLCCs projected to join the trading fleet from the yards and another three likely to do ...

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Preliminary Look at the EEXI Impact on VLCC Tankers

March 18, 2022

Taking a break from current events, this week we look at the upcoming EEXI regulations and the results of our preliminary analysis of the impact on VLCC tonnage.  EEXI, like EEDI refers to an efficiency level that a vessel in service will be required to achieve, measured as maximum grams of CO2 emitted per capacity (dwt) ton-mile under reference conditions for each vessel class.  The entry of this index into force will likely come at the first quarter of 2023, with the first year possibly taking the form of an adoption period before shipowners are required to take action to ...

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Crude Balance Revisions

March 11, 2022

The latest data from JBC Energy reveal the difficulties OPEC and allies have been facing to produce up to their assigned quotas, with the exception of core members such as Saudi Arabia and Russia.  After a 350,000 b/d global balance deficit in January, and with demand at the refinery level not slowing down, the expected February surplus came only up to a meager 89,000 b/d (Figure 1).  Combined with the very high crude prices throughout the month, there was little to no incentive to build up inventories and support crude tanker demand.

The war in Ukraine ...

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Further Analysis on Potential Russian Sanctions

March 4, 2022

Using historical numbers, we estimated that upwards of 50 Aframax and 4 Suezmax cargos per month from the Baltic could be at risk.  In the Black Sea, despite most volumes coming from Kazakhstan and Azerbaijan, a complete halt of marine traffic could lead to up to 39 Aframax and 22 Suezmax cargoes per month lost due to lack of ship supply (Figure 1).  Substitutive barrels are being met by regional sources at present (Libya, North Sea) to augment left-over Russian crude liftings from prior purchasing. 

In 2021, about 4.7% of Med and 5.7% of Baltic Suezmax cargos was ...

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