By the end of 2019, the market will improve, and the prospects for 2020 are basically good.
Since the beginning of 2019, the tanker market has fallen back seasonally. According to the analysis of the authoritative ship broker Asia Jiaxin, by the end of 2019, the market will improve, and the prospect in 2020 is basically good. So far this year, some elements of maritime crude oil trade are under pressure, and the impact of US sanctions has also hit Iran and Venezuela's crude oil exports. At the same time, OPEC LED production reduction agreements are likely to be extended.
It is expected that the demand for DWT of crude oil tankers will increase by 3.4% in 2019, and the long-term export volume of the United States and Brazil will continue to increase. At the same time, it is expected that the demand growth rate of finished oil tanker's DWT will reach 3.7% in 2020. In 2020, crude and refined oil fleet growth is expected to slow to 0.9% and 2.1%. In contrast, the growth rate of tanker demand will accelerate, in part due to the impact of the International Maritime Organization's 2020 sulfur limit order, with crude oil and finished oil tanker demand expected to grow by about 5% and 6%, respectively. Changes in ship speed and floating storage capacity may also have a positive impact on the tanker market in 2020.
VLCC DWT demand is expected to grow to 4.5% in 2019 due to strong growth in long-distance exports from the Atlantic to Asia. However, coordinated production reduction and US sanctions on Iranian oil exports will bring some disadvantages to the crude oil exports of VLCC tankers from the Mediterranean.
In 2020, VLCC's DWT demand is expected to grow further to about 6%, thanks to the continued expansion of us and Brazilian exports to Asia and the potential growth of US imports of sour crude oil from the Mediterranean.
Driven by strong delivery and slow dismantling volume in 2019, the tonnage of VLCC tankers will increase by 5.3%, and the growth of VLCC operating fleet is expected to slow down to 2.2% in 2020. The time to install desulfurization scrubbers may also limit the growth of VLCC tanker fleet in 2019-2020.