The severe impact of Covid-19 on the oil and tanker markets is seen by significant top five increases and decreases in tonne-miles per day in 2020 versus 2019, with the overall still resulting in the 5% fall in 2020, the report cited the APEX data of Lloyd’s List Intelligence.
On the top of the tonne-mile per day increase list is the Scandinavia/Baltic to China Sea route, where tonne-mile more than doubled from 362m tonne-mile per day (tmpd) in 2019 to 843m tmpd.
“The collapse in European oil demand as a result of Covid-19 pushed record volumes of North Sea crude and fuel oil to Asia and the long distance of this voyage amplified the impact on tonne-mile demand,” Poten & Partners wrote.
Significant increases were also observed in two long-haul routes to Southeast Asia, one from South America (757m tmpd in 2020 compared to 449m tmpd in 2019) and the other from West Africa (441m tmpd in 2020 compared to 288m tmpd in 2019).
“The increases from South America primarily orginated in Brazil and Venezuela and were destined for Malaysia, Singapore and South Korea among others. Another growth area was Southeast Asia to the China Sea, which, combined with the earlier point seems to indicate that a significant portion of the crude moved from Brazil and Venezuela was transhipped to Southeast Asia and ultimately ended up in China.
“It is interesting to note that tonne-mile demand on the direct route from South America to the China Sea actually decreased 11%,” Poten & Partners said.
On the other end of the scale, significant decreases were seen in tonne-mile demand in Japan, the US West Coast and North West Europe.
The AG-Japan trade decreased 16% year-on-year to 1.9bn tmpd, and the AG-USWC trade was almost cut in half to 335m tmpd. “The reductions in demand in the US and Europe were clearly caused by Covid-19,” the report stated.
Another country that was heavily impacted by the pandemic was India and that is why the South America to South Asia trade showed the fourth largest decrease of minus 40%. Poten & Partners noted that given the distances involved, all these reductions had a material impact on overall tanker tonne-mile demand.
“Unfortunately, in 2020, the tonne-mile demand for crude oil tankers fell by 5% compared to 2019, largely in line with the decline in global oil demand. On the bright side, the expected increase in oil demand in 2021 should also translate into an equivalent increase in tanker demand,” the report said.
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