Dirty tanker trade saw largest falls in tonne-mile demand on routes to Japan, Europe and North America in 2020, according to a US-based broking house.
Poten & Partners, analysing data from Lloyd’s List Intelligence, concluded global demand in the sector fell 5% from 2019 to nearly 27.4bn tonne miles per day last year. The drop came amid reduced oil demand during the coronavirus pandemic.
The benchmark trade from the Middle East Gulf (MEG) to Japan registered the largest fall in absolute terms, with daily tonne-mile demand dropping by 373m to 1.91bn.
Daily tanker demand for the route from the MEG to the US also collapsed by 48% to 335m tonne miles and for the MEG-northwest Europe trade tumbled by 52% to 186m tonne miles.
“The reductions in demand in the US and Europe were clearly caused by Covid-19,” Poten’s tanker research head Erik Broekhuizen said in a note.
“Given the distances involved, all these reductions had a material impact on overall tanker tonne-mile demand.”
Strong Chinese imports
The negative impact was partially offset by China’s record-high crude imports as the world’s top energy consumer stockpiled cheap crude.
Cited by various media outlets, Chinese customs data showed crude imports reached 542m tonnes in 2020, up 7.3% from the 2019 level.
The Poten analysis showed daily tanker demand for the route from North Europe to China, Taiwan and South Korea jumped by 482m to 843 tonne miles last year, outperforming all other trades.
“The collapse in European oil demand as a result of Covid-19 pushed record volumes of North Sea crude (and fuel oil) to Asia and the long distance of this voyage amplified the impact on tonne-mile demand,” Broekhuizen wrote.
Daily tanker demand on the route from the east coast of South America to Southeast Asia also rose by 69% to 757m tonnes. Meanwhile, demand for trade between Southeast Asia and China, Taiwan or South Korea increased by 81% to 226m tonnes.
The two developments seem to indicate that “a significant portion of the crude moved from Brazil and Venezuela was transshipped in Southeast Asia and ultimately ended up in China”, Broekhuizen said.
In a bid to hide cargo origin due to US sanctions, Venezuelan has been exporting crude to China via ship-to-ship transfers in Southeast Asian waters, according to vessel-tracking specialists.
Dominant trades
In Poten’s first league table for tanker tonne miles, the routes from the MEG to China, Taiwan, Japan and South Korea were leading the pack for 2020.
These were followed by the routes to China, Taiwan and South Korea from West Africa and the east coast of South America.
“To nobody’s surprise…[those] were also the top routes in 2019,” Broekhuizen said.
