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McQuilling Services Tanker Market Outlook 2022-2026

Jan. 28, 2022

McQuilling Services is pleased to announce the release of its 25th anniversary edition, 2022-2026 Tanker Market Outlook.  This 165-page report provides a detailed analysis of oil fundamentals, global economic and geopolitical context in addition to tanker demand and supply projections across eight vessel classes. The interaction of tanker demand and vessel supply variables is processed using advanced quantitative modeling to produce a five-year spot and time charter equivalent (TCE) forecast for eight vessel classes across 24 benchmark tanker trades, plus four triangulated trades.  Also included in the report is a five-year asset price outlook as well as one and three-year-time charter rate forecasts through 2026. 

In consideration of the demand and supply fundamentals uncovered in our analysis, we project spot market earnings for VLCCs to average US $2,500/day in 2022 on a non-eco, no scrubber basis (US $11,000/day for ECO-designs, without scrubbers).  The peak year for VLCC spot market earnings in our models has been pushed out to 2025, amid substantial supply-side support, while Suezmaxes and Aframaxes are projected to return healthier levels in 2022, each benefiting from increased deployment optimization and strong inter-regional trading originating from Atlantic Basin export centers.  The years 2023 and 2024 reveal improving fundamentals for crude tankers, although we are skeptical that crude tanker earnings in 2023 will rise above cash break-even levels for most tankers, as our deep analysis reveals only marginal support to our core supply/demand balance from the forthcoming carbon emissions regulations.

The findings from our product tanker market analysis show a more promising balance of fundamentals in these segments.  The strong oil demand recovery anticipated will be augmented with longer mileage routings caused by changes in regional product balances.  Coupled with this healthy demand outlook, are relatively light increases on the vessel supply side, supporting non-eco spot market earnings for the core product tanker segments, which we project to outperform their crude counterparts in 2022, albeit modestly.  Upward momentum on earnings is duly forecast for clean tankers in 2023, which will finally benefit from a low orderbook of VLCCs and Suezmaxes, which have been demand disruptive to clean tankers over the last couple years.

McQuilling Services’ 2022-2026 Tanker Market Outlook can be purchased online at the McQuilling website or by calling 516-227-5774.