Seaborne oil trade grows by 4.7% in 2015 despite low oil prices

Seatrade Tanker Middle East marks uptick in crude business as operators generate higher profits, but eye an uncertain future; conference expects lively debate amid testing market conditions
The eighth edition of the biennial Seatrade Maritime Middle East (SMME) exhibition and conference, which takes place in Dubai from 31 October to 2 November 2016, at the Dubai World Trade Centre, is organising a conference dedicated to the dynamic and rapidly growing tanker sector.

Part of the Dubai Maritime Week, Seatrade Tanker Middle East, takes place on Tuesday 1 November and is being supported by the International Association of Independent Tanker Owners, INTERTANKO, with managing director Katharina Stanzel, moderating the event.

According to Clarkson Research, a leading provider of data and market intelligence for the global shipping and offshore oil and gas industries, tanker fleet capacity took two decades to double to its current size of 540 million deadweight tonnage (dwt), witnessing average volume growth of 2.2% per annum, in combined crude and products trade. However, the current surge in tanker fleet capacity, was generated during a long period of low oil prices and has recorded an increase of 6.5% since early 2015.

Chris Hayman, Chairman of Seatrade, said, “The tanker sector faced a tough time between 2009 and 2014, but it has now bounced back. Seaborne oil trade grew 4.7% in 2015, the fastest rate since 2009, but operators are still mindful of unpredictable market conditions, moving forward.”

OPEC’s decision to allow the market to balance on its own without price support has perhaps been the biggest catalyst for increased tanker business. But add in the lifting of sanctions in Iran, an estimated global increase in oil refining of 7.7 million barrels per day until 2021 and the swinging supply and demand dynamics and it is easy to understand why this market is growing, albeit impulsively.

“While some tanker operators remain cautious about the future, many are riding high on the back of storage deals with big refineries – especially offshore Singapore and Malaysia – whereby tankers are used to balance supply and demand by removing tonnage from the market,” said Hayman.

Conference delegates will hear from a sterling line-up of industry players, including Ahmed Al Falahi, CEO, Gulf Energy Maritime; Phrixos Papachristidis, CEO & MD, Hellespont Ship Management; Ali Shehab Ahmad, Deputy Chief Executive, Kuwait Oil Tanker Company; Stavroula Betsakou, Head of Tanker Research, Howe Robinson Partners and Capt. David Stockley, COO, Oman Shipping Company.

The panellists will open the event discussing the fundamentals of the crude oil tanker market, looking at the pattern of supply growth, the factors influencing demand and what this may mean for earnings. Factors to be considered will include the impact of oil price movements and geo-politics on the pattern of trade and ton-mile demand, the size of the order book and the likely scale of new contracting, slow steaming with a strong emphasis on the Middle East region, and the outlook for its principal players.

The panel will then turn their attention to product tanker trading, analysing the factors influencing the shape of product tanker demand and those driving it, including refining, and the composition of the order book. The debate will also cover how these fundamentals affect rates across all vessel sizes, with a focus on how the market is shaping up in respect of Middle East interests.
The conference will also examine the implications of the digital revolution on the tanker industry. Panellists will address issues such as the impact that SMART shipping and BigData will have on operating cost efficiencies and the way in which ships are managed in the future.
Finally in a changing regulatory environment, the panel will also discuss how upcoming IMO regulations will affect the tanker sector, starting with the ballast water convention, which comes into force in September 2017 which will require the retro-fitting of new technology for the world tanker fleet.

“Hosting this dedicated tanker conference will allow leading executives from the sector to come together to share opinion about the current issues, and perhaps begin to create a strategic overview for the future direction of the sector,” added Hayman.

Seatrade Maritime Middle East (SMME) exhibition and conference, held as part of the Dubai Maritime Week is organised under the patronage of His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai.