Crude tanker rates to stay strong despite Russia turmoil - owners

Navios Maritime Holdings

19/10/2022 16:06

By Jonathan Saul
       LONDON, Oct 19 (Reuters) - Prospects for the crude oil
tanker market are expected to stay strong for at least the next
year helped by low ship ordering,  despite the loss of some
trade from Russia due to Western sanctions, leading ship
operators say.
    Russia has increased exports to Asia, Africa and South
America following the imposition of Western sanctions for its
invasion of Ukraine. But the sanctions mean many tanker
operators are reluctant, or unable, to transport those cargoes. 
    Nevertheless, tanker players say more longer haul shipments
have replaced much of that trade into Europe ahead of looming
restrictions on Russian shipments to the European Union.
    "With the Russian trade there has been some displacement,
but there is a good amount of upside for the tanker business," 
Thomas Trovato, head of investor relations with tanker group
International Seaways, told a Capital Link shipping conference
in London this week.
    Ratings agency Moody's said in its latest sector outlook 
this month that it expected tanker rates to remain at least
stable over the next 12 months.
    Moody's added that redirection of oil trade flows had led to
higher tonne-mile demand for tankers, especially for the aframax
and suezmax oil tanker segments, as many European companies look
to source crude and oil products from more distant markets. 
    Tonne miles are an indicator of shipping demand, measuring
transported cargo volume multiplied by distance.
    "I just don’t see the order book increasing in the next two
years and I see demand increasing," Robert Burke, chief
executive of Ridgebury Tankers, told the Capital Link
conference.      
    "I think it is going to be a really good 24 months," he
said, adding that prospects were strong for the winter season.  
  
    Crude oil tanker rates in some segments are up over 40% over
the past week.
    Ted Petrone, vice chairman of shipping group Navios
Corporation, said the lack of large scale tanker ordering was
also bolstering rates. 
    "There are extremely low inventories - both crude and
products - and that is very helpful," he said.
 (Reporting by Jonathan Saul
Editing by Mark Potter)
 ((jonathan.saul@thomsonreuters.com; + 44 207 542 4357 ; Reuters
Messaging: jonathan.saul.thomsonreuters.com@reuters.net))