Kuala Lumpur-based MISC Berhad says the tanker market outlook remains positive as the recent shift in trade patterns will support tonne-mile demand and the concerns over the possible disruption to the Russian crude flows have eased.

However, the company expects some moderation in overall average tanker rates in the coming months as the OPEC+ production curbs are likely to squeeze oil supply in the short term.

Firm tanker rates in the first quarter of 2023 despite seasonal softening in demand were credited by the company for the 62.3% year-on-year increase in pre-tax profits, which reached MYR 627.6m ($137m) during the quarter.

“Given the current landscape, the petroleum and product shipping segment has been continuing to improve the quality of its income and balance sheet through its niche shuttle tanker business and rejuvenation of its fleet with greener-fuelled tankers,” MISC said.

The hydrocarbons transporter said that spot rates in the LNG shipping market remained subdued in the first quarter of 2023 as mild winters and ample gas storage inventories in Europe and major Asian countries contributed to the increase in tonnage availability.

“As a result of the subdued spot rates, there is a rising preference by charterers to lock in charters at fixed time charter rates due to the uncertainty in the market. While prospects remain promising as demand is showing signs of recovery, limited supply growth will keep the supply and demand balance tight through 2023,” MISC said.

“Notwithstanding the above, the operating income for the gas assets and solutions segment is expected to remain steady, underwritten by its portfolio of long-term charters.”

MISC’s reported higher revenues from ongoing projects coupled with higher dry-docking and repair activities in the marine and heavy engineering segment, although the company’s overall revenue was impacted by lower revenue recognition from the conversion of a floating production, storage and offloading unit in its offshore business segment.

Captain Rajalingam Subramaniam, MISC’s president and group chief executive officer, said the company recorded “a healthy financial performance” in the first quarter of 2023, adding that its robust performance “stems from our core strength of forging partnerships with strategic clients, championed by our team who is committed to our strategic aspirations”.