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From the 26th to the 28th of January, Vortexa was proud to present at the Argus Crude Live Online Conference 2021.
As part of the conference, Vortexa Managing Director Clay Seigle presented on the panel 'Opportunities in Crude Freight and Storage Markets' alongside BIMCO Chief Shipping Analyst Peter Sand, Affinity Senior Tanker Analyst Charles Chasty, Jefferies Senior Vice President Equity Research Peter Giveans, and moderated by Argus Head of Freight Alex Younevitch.
In addition, you can download here our free report derived from this session on Opportunities in Crude Freight & Storage Markets.
Key Takeaways from the session:
Freight demand from oil flows is at a fraction of what we saw in 2019
The expectation for 2021 is for a slow and gradual oil demand recovery. Volumes of oil in transit are not expected to surpass last year's because of OPEC+ supply limits. Demand is still off compared to 2019 by approximately 10 million b/d
The lack of robust trade flows could be somewhat offset by long-haul trade, as US-China crude appears sustainable and smaller opportunities take root, such as Libya supplying faraway markets.
Biggest factor to watch for oil tanker demand is China. A quarter of all seaborne oil imports in 2020 was made by China which continues to grow. 500 kbd of new refinery capacity is expected to come online in China this year at new, modern facilities that may have a competitive advantage compared to the older units in other parts of Asia.
Floating storage volumes have largely receded to pre-pandemic levels. Reductions in oil supply and return of backwardation in the forward price curve will prevent major accumulations of floating storage.
In 2019, the global crude tanker fleet grew by approx. 6.6%, and on an historic average over 5 years 3.2%. Similarly, VLCC global fleet grew by 9% with an historic average of approx. 4%. Accounting for scrapping of fleets as well, the overall global fleet grew by 3.9% in 2020.