Rising oil production in Guyana has enticed charterers to opt for more very large crude carriers (VLCCs) to haul the country's crude to Europe, drawing competition among vessel sizes in a Suezmax-dominated trade.
PetroChina, ExxonMobil and Shell each provisionally booked a VLCC for Guyana-Europe voyages loading in the first half of February — almost half of the number of VLCCs used on that route in all of 2023, according to market participants. The Guyanese monthly load program typically comprises 11 1mn bl cargoes hauled on Suezmaxes, but exports are expected to increase after output from the Prosperity floating production, storage and offloading (FPSO) vessel began in November.
Prosperity, which is producing about 180,000 b/d and is on track to reach its full 220,000 b/d capacity by the end of March, joins the 220,000 b/d Liza Unity FPSO and the 120,000 b/d Liza Destiny FPSO offshore Guyana.
The three VLCC bookings, which were still only provisional deals by 18 January and subject to cancellation, are a considerable increase for the South American oil producer, which loaded only seven VLCCs in all of 2023.
If the trend continues, the addition of several VLCC fixtures per month would add to growing ton-mile demand for 2mn bl tankers in the Atlantic basin. In 2023, VLCC ton-mile demand for shipments from the Americas, led by the US and Brazil, increased by 35pc from 2022, according to data from Vortexa, driven by shifting trade flows amid Opec+ production cuts and European sanctions on Russian oil.
Europe was the biggest buyer of Guyanese crude in 2023, taking about 225,000 b/d, or 61pc, of the country's exports. Panama took 25pc of Guyana's exports, about 90,000 b/d, and re-exported most of it to the US west coast.
