Despite some negative data points, Poten & Partners expects Opec and its allies to stick to their tanker-boosting production plan.
The broker’s research head, Erik Broekhuizen, said owners can look forward to the bloc slowly unwinding its production cuts later this year, despite growing non-Opec production and sluggish oil demand from China.
“For the tanker market, this means that owners should count on an additional boost from Opec+ this winter,” he said.
Since 2020 and the Covid-19-induced oil price collapse, member countries have implemented a mix of mandatory and voluntary price cuts, which they have indicated would begin to be gradually unwound starting in the autumn.
But Broekhuizen noted the group has surprised the market before and that they could also delay unwinding the cuts.
He said the oil price has remained relatively stable but that slowing Chinese demand and rising production from the US, Canada, Guyana and Brazil butting into the bloc’s market share could give them pause.
“This is bad news for Opec,” Broekhuizen said of production in the Atlantic.
The International Energy Agency forecasts non-Opec production to increase by 1.75m barrels per day in 2025, significantly exceeding expected demand growth of 1m bpd.
This suggests there is no room for Opec+ export growth in the short to medium term.
But he notes that Opec demand forecasts are higher than the IEA’s, which is a point in favour of production increases.
In recent months, the tanker market has been hit with typical seasonal weakness.
The Baltic Dirty Tanker Index fell five points to 920 on Friday, continuing a slide that started in mid-June. Its 52-week high was 1,552 on 16 January.
The Baltic Exchange’s VLCC time charter equivalent assessment fell $469 to $33,129 per day on Friday, while the suezmax reading slipped $58 to $24,880 per day.
Aframaxes finished the week at $25,635 per day, falling $616.
