Q2 turning point

A disappointing second quarter for crude tanker owners may be remembered as the one in which depressed freight rates turned a corner, RS Platou says.

A short term supply threat caused by political issues in Iraq and a potential growth in US crude oil exports both have potential implications for the market, says Ole-Rikard Hammer of RS Platou Economic Research.

Hammer says the danger of supply disruptions from Iraq has seen charterers respond by looking to move cargo from the region before the issue becomes real.

He notes spot activity in the last week of June was the highest seen since March, indicating Iraqi exports are on the rise. 

And with the call on OPEC set to climb by 1.5 million barrels per day in the second half, anybody hoping the market will go very quiet if the Iraqi situation cools is likely to be disappointed, Hammer says.

Turning to the US, Hammer argues the potential emergence of the country as a significant global oil supplier is an important development for the tanker market in the medium term.

“Making precise forecasts about the impact on seabourne trade is premature at this stage,” Hammer said.

He added: “What is clear in the bigger picture thought, is that the long period of cargo drought which has slowed the tanker market likely is beginning to come to an end.”