OSLO: Chinese crude oil demand needs 45 additional very large crude carriers (VLCCs) to support growth in imports of seaborne crude oil, according to BIMCO’s estimates.
China has ramped up its import of seaborne crude oil by 13% for the first nine months of 2017 compared to the same period last year. As China is importing crude oil from further afield in 2017 than in 2016, the tonne miles generated has surged 18%.
This increase in volume amounts to an additional demand of 33 million tonnes of crude oil, equivalent to more than 0.9 million barrels per day on average during the first three quarters of 2017. Thereby, China’s increasing demand is directly affecting the crude oil tanker shipping industry by requiring 45 more VLCC’s to support the growth in demand for crude oil so far for 2017, BIMCO said.
“China’s longer sailing distances for crude oil imports are more than welcomed by the tanker shipping industry, but the market is already awash with tonnage and therefore supply still outstrips demand,” BIMCO’s Chief Shipping Analyst Peter Sand comments.
“As we move into the November – January period, better rates will come around, as this is historically the peak season for oil tankers. BIMCO doesn’t however, expect the same rates as last peak season, as the fundamentals have weakened.”
The countries exporting larger amounts in 2017 than 2016 and 2015 are most notably Angola, Brazil, Venezuela, United Kingdom, Republic of Congo and United States (US).
As US crude oil to China is exported over long distances from the East and Gulf Coast, it is more significant for the crude oil tanker shipping industry than e.g. Russia, due to the high tonne miles generated.
In raw volumes, Russia has exported almost five times more crude oil via the sea than the US during the first nine months of 2017 but generated 60% fewer tonne miles than the US,” BIMCO said.