He was talking about a well tried and tested predictive model which pool managers have used for the last ten years. Based on a range of data including real-life statistics such as the size of the orderbook and likely delivery dates, as well as assumptions on future oil production, demand for products and scrapping, the model is suggesting that there could be a shortage of capacity equivalent to 180 MR products tankers by 2020.
In the short run, Engholm said that cold weather in Europe, the US and north east Asia will provide a boost to the market as short-term demand for heating fuel can increase by a factor of four during a cold snap. This inevitably means a drawdown in stocks which have to be replaced. Inventories are already below their five-year average and the world is consuming record volumes of oil.
Meanwhile ice in the Baltic is also good news for products tanker operators because vessels must slow down or, in severe conditions, stop and wait for an icebreaker. There a range of important products ports in the Baltic, including St Petersburg, Vysotsk, Primorsk Ust-Luga and Vuosaari.
Engholm and his colleagues are not recommending a fresh round of contracting to their pool members, however. Hafnia Tankers, which owns 37 vessels in the pool, has four LR1s on order at Guangzhou Shipyard International in China but is believed to be unlikely to order any more in the near future. However, as Engholm pointed out, there is a close correlation between oil demand and global GDP growth so the outlook looks set fair.
Hafnia Management operates a 121-ship pool consisting of handy, MR, LR1 and LR2 tankers. It is the second largest clean petroleum products tanker operator after Scorpio Tankers. A pool in this market is a popular choice for many owners of products tankers because economies of scale and minimising ballast days are more easily handled over a large number of ships.