Unknown dark clouds seem to shrouded in the top of the tanker market, 2018 will be a challenging year.
Ship broker Gibson said 2018 will be the busiest year for a new tanker ship to be delivered from 2010, with up to 40 million deadweight tons of crude oil and product tankers expected to be delivered, up from 35.5 million deadweight tons delivered in 2017 .
Given the size of the delivery of new vessels, market participants have high hopes for potential deferred delivery as a way to ease over-supply in the market.
Gibson said the delay in delivery will become a major feature of the 2018 oil shipping market fundamentals, especially in the field of crude oil tankers, delayed delivery of the number of ships may be increased compared to 2017. However, the same oil-shipping market fundamentals may encourage owners to dismantle their older vessels, which, if combined with a delay in delivery, may help to offset the partial supply growth in 2018.
In 2017, the delayed deliveries of refined tankers hit record highs. With the LR1 product line, the delayed delivery rate has risen to 38%. Gibson data show deliveries of Afrah tankers and LR2 tankers drop by 27% compared to expectations and Suez tankers dropped 21%, while VLCC declined just under 11%.
In addition, resistance to demand may persist, especially as OPEC insists on a cut in output.
The International Energy Agency predicts that by 2018, the average daily output of oil will be 1.3 million barrels, down from recent years but above the long-term average.
According to the U.S. Energy Information Administration, the U.S. crude oil output is expected to reach an average of 775,000 barrels per day by 2018, most of which may be exported. Therefore, in the market demand, the United States is the most noteworthy. In addition, oil production is also expected to grow in Brazil, Kazakhstan and Libya.
However, it remains to be seen whether these increases in demand will be enough to support the increase in oil-shipping costs this year and continue to push the market recovery.