Freight rates for crude and products will see rapid gains in 2023 and 2024 — similar to 2008, when rates often exceeded $100,000/d — with demand growth outpacing tanker supply, according to shipping association Bimco.
Demand for crude tankers will grow faster than supply by 2.5-3.5pc in both 2023 and 2024 and for product tankers this will be 4.5-5.5pc in 2023 and 2-3pc in 2024, said Bimco. In addition to this, the EU embargoes on Russian crude and products will mean Europe has to import from further-flung destinations, resulting in a 3-4pc increase in average sailing distances — adding significantly to tonne-mile demand and pushing spot freight rates higher.
The tightening of the demand-supply balance will lead to an increase in freight rates, time charter rates and second-hand ship prices, it said.
"The market will experience a period of sustained market strength that has not been seen since the 2008 financial crisis," said Bimco.
This jump will come on the back of the EIA's prediction of higher liquid fuels consumption in 2023 and 2024, along with the IMF's forecast of global economic growth over the same period — because of an improved outlook for the Chinese economies.
The EIA predicts China will account for 38pc of the growth in oil demand between 2022 and 2024, and India for 18pc. The Middle East will account for 15pc of growth.
Supply of new tankers will have a limited effect on demand growth, though, as Bimco forecasts crude tanker fleet growth of just 0.9pc in 2023 and 1.5pc in 2024. The product tanker fleet will grow by even less — just 0.4pc in 2023 and 1.1pc in 2024.
