APRIL 19, 2017—While overall seaborne demand for Very Large Crude Carriers (VLCC) and Suezmax tankers was down 4.6% in the first quarter of this year as compared with the previous quarter, there was strong demand for exports from the North Sea and the U.S. Gulf of Mexico.
According to William Bennett, Senior Analyst at VesselsValue, the global VLCC and Suezmax fleets logged over 2.5 trillion ton miles in the first quarter. VLCC demand was down 5.42 from the previous quarter.
Bennett points out that over 50% of seaborne demand for crude exports stems from the Arabian Gulf. “In the first quarter, Arabian Gulf export ton mile demand fell by a mammoth 14%. This follows promised OPEC production cuts, however, evidence shows that although AG exports are down, the slack is being met elsewhere.”
Exporters of crude in the North Sea and the U.S. Gulf of Mexico are picking up the slack. According to VesselsValue, the North Sea recoirded its strongest quarter ever, with seaborne demand for VLCC and Suezmax cargoes jumping 14%, as shown in the accompanying graph.
In the U.S., ton mile demand rose above 70 million ton miles which over the last two quarters represents an increase of a whopping 145%. A number of these journeys are comprised of VLCC cargoes over Suezmax on the long-haul from U.S. to locations such as China and Singapore.
The last quarter has shown that world VLCC and Suezmax ton miles have decreased; as have exports out of the Arabian Gulf. However, smaller producers have worked to meet the gap in demand.