Banks upgrade tanker outlook as growing ton miles support demand for the foreseeable future.

Last week, numerous banks covering tankers upgraded their outlooks for the tanker market with price target upgrades for major tanker owners as analysts conclude that the bull run has legs. Jefferies, a US investment bank, highlighted that the OPEC+ cuts have been net positive for tanker markets as the non-OPEC supply has grown at the same rate as the OPEC cuts, but importantly, add greater distance to the market, with a net positive effect for tankers. The prospect of OPEC+ reversing their cuts would add supply to the market, further boosting demand for tankers in the process. Ship broker Poten & Partners also focused on crude supply growth last week, focusing on the expansion of the Trans Mountain Pipeline, forecasting the ability for Canada to export an additional 580,000 barrels per day, from May 2024.

“Global crude supply outlook favors strength for tankers”

Ukraine continued its attacks on Russian oil refineries last week, with a drone attack setting the Ryazan refinery ablaze. Bloomberg reported, before the latest attack that around 11% of Russia’s refinery capacity is currently offline. Critically for the tanker market, Russia has very little oil storage, and therefore, greater levels of crude exports may result if refineries can no longer absorb Russia’s domestic oil production. Sanctions restrict this trade to the dark fleet but can still increase overall fleet utilization.