Tanker operators can look forward to two years of solid income despite concerns over potential oil production cuts and price hikes, Bimco says.

Increased sailing distances and record oil consumption will underpin gains, with the crude tanker market expected to grow up to 6% next year and 3% in 2025, according to the shipowner group’s fourth-quarter outlook.

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The product tanker market is expected to grow by a similar amount next year, but half a percentage point lower than the dirty sector in 2025.

Supply forecasts suggest that extra exports will come from the US, Guyana and Brazil, while new refinery capacity is being added mainly in Asia, contributing to the growth in tonne-miles.

“As long as the number of transits through the Panama Canal remains constrained, this will further add to increased sailing distances,” said the report by chief shipping analyst Niels Rasmussen.

Bimco said production cuts by leading Opec+ members Saudi Arabia and Russia meant supply lagged behind demand in the second half of this year, leading to drawdowns of global inventories.

An end to those Saudi-Russian cuts could create surplus supply in 2024 and allow the rebuilding of inventories, which would boost tanker markets.

“For crude and product tanker demand, the main risks are considered to be an extension of production cuts by Saudi Arabia and Russia, significant price increases hurting demand and a reversal of sanctions on Russian exports,” said Rasmussen.

Brent crude prices rose by more than 1% on Wednesday to reach $82.39 a barrel before a meeting of Opec+ countries that is expected to consider potential continued or deeper cuts amid concerns about the Chinese economy and high interest rates.

But the low orderbook, particularly in the crude sector, provides the basis for hope of continued strong performance in tanker markets, said Bimco.

The crude tanker fleet is forecast to grow 0.7% in 2024 and just 1.1% the following year. The product tanker fleet will grow faster, by 1.9% in 2024 and 4.4% the following year, which could weaken the position of the clean sector.

“Overall, however, we remain confident that tanker owners and operators can look forward to two years of solid income both in the freight and time charter markets,” said Bimco, which represents more than 60% of the world’s tonnage.

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