Shipping industry news: Shipbroker Gibson Shipbrokers noted that the weakening demand for crude oil in China will have multiple impacts on the tanker market.
Gibson Shipbrokers cited the latest forecast from the International Energy Agency (IEA) this month, predicting that China’s crude oil demand will grow by only 100,000 barrels per day between 2024 and 2030. This marks a significant change compared to last year’s forecast.
In July 2023, the IEA had projected China’s crude oil demand to increase by 410,000 barrels per day. However, by September of the same year, it revised the growth rate down by more than half to 180,000 barrels per day, stating: “China’s oil demand growth momentum appears to have been exhausted, while demand in most other countries is either growing slightly or declining. The current trend reinforces our expectation that global oil demand will peak by the end of this decade.”
In its latest report, the IEA further lowered its forecast for China’s crude oil demand in 2030 to 1.4 million barrels per day, citing expected slower GDP growth and accelerated decarbonization in the automotive sector. Electric vehicles alone could displace 5 million barrels per day of global oil demand by 2030, with nearly half of this reduction stemming from weaker gasoline demand in China.
Gibson Shipbrokers stated that the multiple impacts of China’s changing demand on the tanker market will include a shift in vessel demand from Very Large Crude Carriers (VLCCs) to other ship types, while demand for chemical tankers and gas carriers may rise as oil growth shifts toward petrochemical feedstocks and liquefied natural gas. Additionally, demand for specialized tankers will increase as traditional refined fuels transition to biofuels.
Gibson Shipbrokers pointed out that the growth in crude oil demand east of Suez will be met by increased supply from west of Suez (primarily from the Americas), which could support long-haul trade between 2024 and 2030. However, the IEA’s further adjustments last year reflect slowing demand declines in the West and decelerating growth in the East, which will weaken demand for crude oil tankers.
Furthermore, Gibson Shipbrokers mentioned that as demand for traditional fuels slows, product tankers will face challenges in the coming years. The addition of new refining capacity closer to demand growth centers will also impact the demand for clean petroleum products.
