The accompanying impacts of the Covid 19 pandemic, with a declining demand for oil and oil products, negatively impacted global seaborne oil shipments in 2020, with crude oil trade down 8% and oil product trade down 12% for the full year 2020, according to Clarkson Research.
In response to the drop in demand in 2020 and the resulting crash in crude oil prices, crude oil production in 2020 averaged 91.1 million barrels/day, the lowest level in the last decade. Production is not expected to increase again until markets recover, which is estimated in the second half of 2021.
In this context, rates took a roller coaster ride over the course of the year. While oil tanker revenues averaged just under US$70,000 per day at their peak in April 2020, average revenues just reached US$7,319 per day at the end of 2020 and fell to their lowest level in over 20 years in January 2021 at US$5,359 per day.
On the supply side, the combined crude and product tanker fleet experienced a sharp decline in deliveries in the 2020 Corona year. The oil tanker fleet increased moderately by 2.7% up to 539 million dwt in 2020. Only 143 newbuildings with a capacity of just under 19 million dwt were delivered - a 42% drop compared to 2019. According to Clarkson Research, 23 million dwt of new tonnage joins the fleet in 2021. Thus, rates in the oil tanker market will remain under pressure in the coming months as fleet capacity continues to grow and global seaborne crude trade is not expected to reach 2019 levels before 2022.
The ISL SSMR 2021-2 highlights various developments across the major tanker markets and is available via our Webshop and has just been sent to subscribers.