Poten & Partners: Smaller Tankers Likely to Benefit from Qatar Crisis?

Illustration; Image Courtesy: Tanker Investments

If crude oil vessels from Qatar are banned from entering neighboring countries’ ports, it could have a small negative impact on the VLCC market, although Aframaxes and Suezmaxes may benefit, Poten & Partners said, reflecting on the implications of the Qatar crisis for the tanker market.

With co-loading being a common practice withing the Middle East, the need to split cargoes for one-port loading in Qatar for product carriers, especially the ones involved in the naphtha trades, will create more demand for smaller MR and Panamax (LR1) product tankers.

On the other hand, it will reduce the use of the larger Aframax size LR2 ships, according to Poten & Partners.

In the short-term, the uncertainty and loading inefficiencies have added a small premium to tanker rates in the Middle East, but even if the crisis continues and unless it escalates, markets will quickly adjust and normalize, the consultancy explained.

Reuters reported that the costs to transport fuel and crude oil from Qatar are expected to rise as clients are splitting cargoes on smaller Suezmax carriers to load separately in Qatar and the UAE. As informed, Suezmax rates could rise to between Worldscale (WS) 75 to 80 due to increased demand for these ships.

Compared to the country’s role in the LNG market, Qatar is small player in the oil markets. Combined, Qatar exports more than 1 million b/d of crude and refined petroleum products, almost exclusively to Asia.

Qatar is also an important source of naphtha, a lot of which is part-loaded on LR2 tankers in Ras Laffan, before the vessels head to Saudi Arabia, Kuwait or the UAE for additional cargo stems.

On June 5, Saudi Arabia, Egypt, Bahrain and the UAE cut diplomatic ties with Qatar.

In the aftermath of their decision, the countries, led by Saudi Arabia, agreed to suspend seaborne travel to and from Qatar.

The port authorities of these countries have issued restrictions on marine navigation to and from Qatar, but Egypt has not put any restriction on transits through the Suez Canal.

 

Share this article

Follow World Maritime News

In Depth>

Events>

<< Oct 2017 >>
MTWTFSS
25 26 27 28 29 30 1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31 1 2 3 4 5

Europort 2017

The 38th edition of Europort will take place from 7-10 November 2017 in Rotterdam Ahoy. Established as one of the world’s leading maritime…

read more >

Mozambique Gas Summit & Exhibition

Mozambique Gas Summit & Exhibition is recognised as the leading strategic meeting for Mozambique’s gas industry. Working in partnership…

read more >

FCCA Cruise Conference & Trade Show

The ​FCCA ​Conference ​is ​a four-day ​event ​designed ​to ​foster ​a ​better ​understanding ​of ​the ​inner ​workings ​of ​the ​cruise…

read more >

Bulk Liquid Storage Europe 2017

The event will cover current key challenges and issues faced by the industry and provide in depth discussions and analysis of today`s…

read more >