Tanker players will need to wait for at least another day before they can gauge how the market will evolve in the coming months based on the Opec+ production plan.
Newswires reported Opec and its Russia-led allies were on Thursday discussing a proposal to raise crude output by 400,000 barrels per day every month between August and December.
But the 23 major producing nations known as Opec+ failed to agree on a final plan and their online meeting was adjourned to Friday.
Analysts expect more seaborne crude flows if the Opec+ eventually decide to go ahead with their proposal.
“[If] Opec+ continues to gradually raise output in the months ahead, we'll see this reflected in greater seaborne flows,” ClipperData’s director of commodity research Matt Smith told TradeWinds.
“As Saudi Arabia has been increasing production, we are also seeing that the kingdom gradually increasing exports. This will only continue as demand rebounds.”
McQuilling Partners commercial director Stefanos Kazantzis estimates vessel demand will increase by 23 to 25 VLCCs or equivalent based on the Opec+ plan.
“All in all, from the demand perspective, there is reason for optimism that things will improve,” Kazantzis said. “More liftings, more cargo opportunities primarily out of the Middle East.”
But he added that tonnage oversupply would constrain the market upside amid insufficient scrapping, continued newbuilding deliveries and vessels released from floating storage.
“It's unlikely that by the end of the year, you're going to see any material improvement in the [supply-demand] structure,” Kazantzis said.
“We're still dealing with the tremendous amount of oversupply.”
