The crude tanker market had one of its best runs in history but is now facing pressure as crude supply dwindles and floating storage unravels. Andrew Wilson, head of research at shipbroking group Barry Rogliano Salles (BRS), considers the long-term prospects to be strong, though. Tanker spot rates have been flagging since they surged to stellar highs on the back of storage capacity shortages in spring. Is it the end of the "boom" or do you expect a rebound? Andrew Wilson: I am not expecting a significant rebound in rates over the re- mainder of 2020 and into 1H21 as there will be too much tonnage chasing too few cargoes. Nor a repeat of the storage issues (driven by Saudi Arabia embarking on an ill-fated battle for market share) which helped to propel tanker rates higher. OPEC have returned to their traditional market management role and have started meeting on a monthly basis which means that they can react (and stop) the oil market becoming under- (or more likely) over-supplied. Our balances suggest that global oil production will remain around 8.5 mb/d lower year-on-year which will directly equate to less tanker demand. This is around 4 less VLCC fixtures per day.
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