Relative strength forecast for crude tanker market in April/May

Earnings for all crude tankers are expected to stay above $10,000 per day with VLCCs going as high as $25,000 a day, suezmaxes $22,000 a day, while aframaxes are expected to peak at $20,000 a day.

Earnings in the products market are expected to hover for LR1s between $10,000 a day on the benchmark AG/Japan route at $10,000 to $15,000 day and LR2s, $12,000 to $17,000 a day - considerably higher than last year's averages. Handysize rates are expected to outperform MRs at $12,000 to 18,000 a day against $8,000 to $13,000 a day.

Lower oil demand from Japan with lower refinery output is a driver on both sides of the equation, but fortunately Chinese oil demand from West Africa is on the rise on the back of favourable prices compared with Middle East oil on the Dubai benchmark.

On the supply side, deliveries of crude carriers have slowed dramatically - six VLCCs have been delivered this year but three scrapped, only two suezmaxes have delivered (but two scrapped) and no aframaxes. The crude fleet capacity has only increased 0.2% this year so far.

The story is different in product carriers, in particular MRs.

Some 74 new MRs were delivered last year and 19 already this year with another 74 scheduled, though no doubt there will be some slippage, from a total orderbook in the 40,000dwt-60,000dwt range of 270 vessels.

Bimco says the tension around the Russian annexation of Crimea has had no effect yet on the oil market as the Ukraine is not a transit country for Russian oil. According to the US Energy Information Administration, Europe received as much as 36% of its oil from Russia which accounted for 71% of Russian exports. Should this trade be affected, oil product imports into Europe and Russian oil exports going east would be the likely effect thinks Bimco.