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Tanker popularity is set to spike for many years

Tanker

UK-based shipbroker Gibson expects the Johan Sverdrup’s operation to propel tankers’ demand

In their latest market report, Gibson observes the UK’s struggle in accustoming itself to post COVID-19; and expects the drastic change in daily functioning, operations and lifestyles to cause a sharp decline in oil demand.

Oil demand to reset
Gibson remarked, “We anticipate the demand for oil will permanently change upon our return to what is deemed as ‘norm’. Have we reached peak oil demand, and will there be a decline? The pressure to combat climate change is likely to continue unabated, especially as President Biden committed the US to halve CO2 emissions by 2030. How demand will change around the world will depend on a variety of factors.

“Currently, ‘oil majors’ only hold around 12 per cent of oil reserves, this compares to around 66 per cent of the world’s petroleum supplies being in the hands of National Oil Companies (NOCs) such as Saudi Arabia’s Aramco, Russia’s Rosneft or Mexico’s Pemex. Other independent oil companies take the remaining 22 per cent. This means that even if the oil majors commit to become cleaner ‘energy’ companies, their influence is smaller than in the past.”

That translates to NOCs dominating the future oil supply. Geographically, nations highly dependent on oil will not reduce production. The opposite instead will happen, with more advantages to enjoy if they are priced well. Carbon Capture may be a way for NOCs to continue producing hydrocarbons to offset their future carbon emissions.

Competition from electrified transportation
Gibsons also added a question of need would surface – while this new breed of vehicles gradually gains a stronger presence, it might not necessarily tip the scale in its favour. Oil-based fuel may remain important in the sector. Similarly, the massive plastics, chemical, fertilizer, and textiles industries depend on products derived from oil. So, the overall ‘greening’ of the global economy currently focuses on the easiest parts to green, those of the power and transport sectors. A combination of renewable energy and electric vehicles means that oil will face competition in the transport and industrial markets – potentially the first in history.

“Oil has made the modern world in which we live, finding a replacement for the black gold and the many things that it can provide will be a hard-won process. That process now seems to be gaining momentum, but, despite all this, direct replacements will be at least a generation away. Implying there will be continued demand for oil, product, and chemical tankers for decades to come, even if the industry has to live with easing absolute demand at some point”, Gibson concluded.

 

Source:
Hellenic Shipping News

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