Poten & Partners sees US crude exports continuing to increase into 2018, although the New York broker of both ships and energy commodities warns that the situation could change rapidly.
Poten tanker researcher Erik Broekhuizen said in a note to clients that US crude cargoes are also moving further afield, with 59% of this year's volumes headed to Asia and giving a tonne-mile boost to the dirty tanker market.
"The growth in US exports is real and the recent trend towards shipping the crude to longer haul destinations in Asia will provide a significant boost for tonne-mile demand," Broekhuizen said.
The growth in US exports is real and the recent trend towards shipping the crude to longer haul destinations in Asia will provide a significant boost for tonne-mile demand.
Erik Broekhuizen
He explained that aframax and suezmax tankers, which carry the bulk of US crude exports, are not the only sector receiving a boost. VLCCs, too, are getting in on the action
Broekhuizen's comments come as rising exports from the US have eased the pressure on the tanker industry as Opec cuts production in an effort to bolster prices.
Stifel analyst Benjamin Nolan, who covers shipping stocks for the bank, said today that US drillers are stepping up to fill the Opec void, lifting production to 9.3 million barrels per day, an increase of 10% since July.
And cargoes have moved to China, South Korea and India - key markets for Opec producers.
"Although US exports do not completely make up for the lack of incremental output in Opec, the higher tonne mile demand does provide a needed increase in VLCC vessels," Nolan said.
But Broekhuizen cautioned that US oil producers react to price swings that could lead them to turn off the taps.
"While the expectation is that US exports will continue to increase into 2018 on the back of higher tight oil production, it is important to remember that this can change quickly if (relative) prices move against producers and/or importers," he said.
