The rise in long-haul exports of crude oil will not be sufficient to push tanker shipping freight rates higher according to a new report by global shipping consultancy, Drewry.
The latest Tanker Forecaster report noted that the US and Nigeria’s production of crude oil was expected to climb higher in the coming years leading to an increase in long-haul exports from both these countries.
However, due to the lower output in crude oil expected from the Middle East, a surging tonnage supply, the capping of the global oil trade and a slowdown in oil demand growth, the increase in long haul trades will not be enough according to a Drewry spokesperson.
“While global oil trade is expected to increase by around 6% during 2017-19, tonne-mile demand is expected to increase relatively faster by 7% due to an increase in long-haul trade,” said Drewry’s lead analyst for tanker shipping, Rajesh Verma.
“As the supply is seen surging by more than 13% during this period, freight rates will decline further,” he added.
