The results come as the maritime industry faces its toughest period yet – with oil prices falling by more than 70% since mid-2014 – and with the recent supply agreement by Opec to cut production. Conducted ahead of Sea Asia 2017, the survey was carried out among maritime leaders to identify trends to shape discussions at Sea Asia 2017 next April.
Global expert on oil macro analysis and managing partner of Rystad Energy, Jarand Rystad, a speaker at Sea Asia 2017, said the big debate right now is whether markets are in fact experiencing a structural change or a traditional cycle.
“The continued growth of US shale fields and recent significant reduction in costs to develop this resource clearly represents a structural change. The counter view is that shale alone still cannot balance the decline in supply globally. Therefore, conventional production from onshore and offshore will still be an important part of global supply growth beyond 2020,” he said.
On the recent Opec announcement to reduce production, Rystad shared, “The surprisingly firm agreement by Opec surely puts the cartel back on stage, but the relatively modest response in oil prices could be short-lived. In the coming years, oil prices will firstly be regulated by market forces. Balancing is also happening slowly but firmly from thousands of producing oil fields around the world.”
The Sea Asia 2017 survey also revealed that only a quarter of the maritime leaders expected oil prices (26%) and the maritime industry overall (25%) to rebound to pre-2014 levels in the next six months.
The leaders cited tonnage oversupply (83%), innovation (44%), and talent shortages (30%) as other critical issues facing the broader maritime industry in the current down-swing.
Despite these challenges, 77% of leaders said they were confident in the industry’s long-term prospects.
David Roberts, managing director of The Standard Club Asia, said it is important for maritime companies to use the period for reflection, and to keep a long-term view.
“In the past, the industry has been too focused on growth at all costs, and through this downturn we’re seeing a positive shift of attitudes towards achieving efficiencies, cost-control, and sustainability. Companies should also take care not to reduce operational capacities too greatly, as they may find themselves behind when the market rebounds,” said Roberts.
In preparation for an eventual upturn, 85% of maritime leaders are focusing on talent development, following extensive down-sizing across the industry. Tighter control of costs, greater industry collaboration, and research and innovation were also identified as the top priorities for leaders in the next 12 to 18 months.
Seatrade chairman, Chris Hayman, said the results of the Sea Asia 2017 survey clearly show that players across the industry are facing a challenging time, and there is a real desire for collaboration in key areas.
Hayman said, “During the downturn, most leaders have said they will focus on innovation and talent up-skilling to meet future challenges. In this environment, our conference themes for Sea Asia 2017, including technology and smart shipping, will provide a critical platform for discussion and debate, and will bring together exhibitors from across the region with new technologies and skill-sets.”
Sea Asia 2017 will be held in Singapore at the Marina Bay Sands®, Singapore from 25-27 April 20
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