Asian tanker outlook bright but difficult to forecast

Nov 27, 1996 01:00 AM

The outlook for tanker owners in Asia is bright due to high oil demand. The potential for further oil consumption growth in Asia is large, offering significant opportunities for both crude oil and product tanker owners. By 2005, Asian oil consumption is expected to rise by one-third to about 22.5 mmbpd. Even excluding Japan's consumption it will equal North American demand. The most remarkable development in the Asian crude oil trades over the past few years has been the greater use of VLCCs (160.000 dwt +) with a 60 % increase in east-bound fixtures from the Middle East, the region's largest source of oil. By 2005, the Middle East is expected to account for about 58 % of oil consumed in Asia compared to 52 % at present. The burning question for tanker owners is now whether to buy large tankers for crude oil or smaller ones for refined petroleum products. The key to this is the extent to which new oil refining capacity will be built in Asia. Refinery production in Asia, currently at 16 mmbpd, will have committed additions of 1.9 mmbpd by 1997 and various additions of 1.35 mmbpd are planned by 2000. There are dozens of other proposals that may, or may not, materialise, which make forecasting tanker requirements difficult. The tanker market for refined products has suffered to some extent in 1996 from an increase in new refinery capacity in Asia, especially in South Korea. But intra-Asian seaborne trade in refined products is on the rise, doubling to 1.7 mmbpd between 1990 and 1995.

Source: not available
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