Tanker rates could start rising towards the end of 2021, but not before navigating some choppy waters, Alphatanker predicts.
AXSMarine's research arm said in its December monthly report that the beginning of next year will continue to bring depressed demand followed by the wind-down of floating storage, which supercharged rates in the first half of 2020.
Still, oil supply is tabbed to rise, leading to "a steady recovery in tanker demand towards the end of next year".
The monthly Alphatanker note said: "We remain cautious in our outlook for tanker hire rates as there remain several bumps in the road which must first be negotiated, notably the ongoing wind down of floating storage which should occur over the next six months."
"This will hit tanker markets with a ’double whammy’ as firstly, ‘pure’ oil import demand is substituted for inventories and secondly, it will see more tankers forced into an already-over-tonnaged market."
The note said global demand rates in 2020 were cut drastically across the board, with Alphatanker's fourth-quarter estimate 2.5m barrels per day lower than their June forecast.
"We suggest the same pattern will prevail across 2021 and that the global oil market faces a long and difficult ascent back to its pre-pandemic level which will contain plenty of road bumps," the note said.
Among those road bumps are rising coronavirus cases in Europe, the US, Japan and Korea.
Alphatanker said it does not believe Japan and Korea would put strict lockdown measures in place, but moves made by governments in Europe could see movement restricted.
The forecast pushed researchers to cut its projection for European demand by 200,000 barrels per day.
Globally, Alphatanker expects oil demand to average 96.8m barrels per day in 2021, 5.5m barrels per day more than 2020, but still 2m barrels per day lower than pre-pandemic levels.
It also predicts persistent inventory overhang and demand to outstrip supply as Opec+ continues to manage the market.