BEGINNING THIS SUMMER

Increased oil consumption, which entails greater demand for tanker transports, is the most important factor, which according to Concordia Maritime’s President Kim Ullman is reason for optimism in the months ahead. “With oil consumption increasing more than oil production, oil stocks in the world are constantly declining and when a certain level of inventory is reached, production and export of new oil must come up to speed again. At today’s pace, this will occur sometime later in the spring.”

“What we have been through during the latter half of 2020 and the beginning of 2021 has been a true acid test for the tanker market, but it is also a prerequisite for the market lifting in the short term – we have to attain balance in the markets,” says Kim Ullman.  

ANOTHER POSITIVE FACTOR IS LOW FLEET GROWTH

“During 2021 and 2022, net growth in the global tanker fleet is expected to be around 2 percent, which is historically low,” says Kim Ullman. “At present, virtually no new orders have been placed for ships, which means an extension of the low growth rate. In addition, we are seeing a continued trend towards longer transport distances as emerging countries in Asia are expected to account for a growing share of increased oil consumption. This entails increased distances and thus increased transport needs as well.”

Despite the fact that the market is weak at the moment, all vessels have fairly continuous jobs, and no vessels are in lay-up.  Consequently, even small increases in demand for tankers will have a big impact on cargo rates.

Concordia Maritime has set its sights on optimal preparation for the expected upswing.

“During the spring, we will continue the work with periodic maintenance and upgrades of vessels, including installation of systems required by law for purification of ballast water. Once the market turns, we will be able to put full focus on serving our customers – and thereby actually start making money again,” says Kim Ullman in conclusion.