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

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>

<< Feb 2020 >>
MTWTFSS
27 28 29 30 31 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 1

The 9th Annual Event Green Shiptech China Congress 2020

The 9th Annual Event- Green Shiptech China Congress 2020 will be held on next…

read more >

2nd GREENTECH IN SHIPPING GLOBAL FORUM

Forum you will find out from the regulators, government bodies and major ports’ representatives what the near…

read more >

7th Annual Arctic Exchange

Every year the Exchange invites delegates from across the globe to come together to listen to key senior management teams…

read more >

World Future Ports Summit 2020

This event will bring together ports and maritime shipping professionals from global leading companies and authorities to discuss recent digital technologies…

read more >