Tankers playing waiting game ahead of stronger demand
Spot tanker rates in both the crude and product segments have slipped in recent days. Headline VLCC rates are quoted at around $8,000/day, though an eco-ship is earning closer to $14,000/day while a scrubber-fitted eco-ship is seeing earnings of $17,000/day. Similarly for products, LR2s are assessed on the Arabian Gulf / Far East route at just $9,500/day; however triangulated earnings are closer to $11,500/day. These earnings compare to $19,000/day a week ago, with the softening coming as a result of increased vessel availability. Current rates however equate to $15,000/day for an eco-ship and nearly $17,000/day for a scrubber-fitted eco-ship. Thus, while headline rates may appear soft, companies with newer fleets are earning significant premiums. We expect tanker rates to gradually strengthen in the coming weeks and months as oil demand remains on the rise and higher OPEC+ volumes are on the way. As we indicated last week, the IEA raised its global oil demand forecasts following the IMF’s stronger report for global GDP growth in 2021 and 2022. According to the IEA, global oil consumption is expected to increase from 93.7 mb/d in 1Q21 to 99.5 mb/d in 4Q21—which should cause a material decline in oil stockpiles (they have already been on an aggressive downward trend) and lead to further OPEC+ production aside from the 2.15 mb/d it has already committed. In addition, global refinery runs are expected to increase by 6.8 mb/d by August, which we estimate will lead to at least 2 mb/d of additional product tanker demand (or 10% of current trade).