The crude tanker owner outlined positive prospects for the final quarter of this year, saying that refinery production is anticipated to return to higher levels ahead of the IMO new 0.5% fuel sulphur cap from 1 January 2020.
In addition, the disruptions around the preparation for IMO 2020 and in particular from VLCC/suezmax vessels voluntarily exiting the trading fleet in order to retrofit scrubbers should reduce vessel supply during a period of seasonal demand strength.
“We remain constructive on freight rate recovery in the fourth quarter, based on continued US crude export volume growth and IMO 2020 preparation and its related induced reductions to vessel supply,” commented Hugo De Stoop, ceo of Euronav.
Read more: Tanker shipping market to improve on tight tonnage ahead of IMO 2020
The restraint in ordering of large crude tankers since the start of the year has also been welcomed and encouraging, the company noted.
Since early-January only one VLCC order has been confirmed with the rolling 12-month order flow for VLCC running at six-year lows.
Euronav believes that the uncertainty around future propulsion systems and the fuel they require in line with the long term greenhouse gas (GHG) reduction set by the IMO for 2050 should contribute to further ordering restraint.
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