BRS Group is predicting a busier VLCC market thanks to plunges in oil prices.
Weakness in Atlantic barrels has become more pronounced in September, narrowing the Brent to Dubai spread and shifting competitiveness dynamics, the shipbroker said.
This is expected to drive a rise in VLCC revenue out of the Atlantic in the coming weeks.
The upturn will be reflected in October loadings, pushing up VLCC utilisation, it added.
State producer Saudi Aramco cut oil prices to Asian refineries in October to their lowest level in three years at $1.30 per barrel above Oman/Dubai.
And BRS argues that there is potential for further cuts as the Brent spread narrows, with Saudi Arabia bidding to keep market share, particularly as Canadian exports are becoming “extremely competitive”.
This cheaper oil could boost Chinese imports.
BRS mentioned rumours that Chinese refineries are now buying 16m barrels per month to refill the national strategic reserve.
However, the world’s biggest independent oil trader, Vitol, believes China’s petrol use will begin falling, adding to concerns about oil demand.
“Gasoline is likely to peak this year or next year in China — not because nobody’s moving, but simply because the fleet is slowly changing towards electric vehicles,” Vitol chief executive Russell Hardy told Bloomberg.
The Baltic Exchange VLCC index has risen 45% in a week to $32,000 per day from the Middle East to Asia.
Eco scrubber-fitted ships are making $43,200 per day, and $48,000 per day from West Africa to Asia, up one-third over the same period.
