Page 19 - Annual Review 2021 full

Annual Review 2021

Tanker and Product Refining to 10,000 levels and majority of the population
The tanker market has experienced an extended getting vaccinated, there would be fewer restrictions
period of weak rates since the middle of 2020 with from the government authorities, which will push up
average tanker earnings in January-August 2021 consumption and thereby crude movement.
standing at just $6,297/day and of VLCC at $2,397/
day. This is the lowest annual average for over 30 In the spot market, crude supply has been
years. severely curtailed by OPEC+ which has impacted
movement of crude across the world. This coupled
The low demand due to COVID-19 and ongoing with increasing vessel supply has led to depressed
output cuts are limiting the rebound in seaborne freight markets for the VLCCs and Suezmaxes.
oil trade though improvements are expected in Vessel supply has outnumbered cargoes in regard
2022. Overall in 2021, the crude tanker market saw to trade into India.
a lowering of demand for fuel (road, rail and air
travel was impacted due to the pandemic) and at Going forward in 2022, it is expected that post the
the same time there was a rise in fleet numbers. winter months, OPEC+ should increase the supply
This led to the softening of the tanker market. While of crude oil into the market which will push the
oil tanker earnings have improved in November but demand for tankers. However, the quantum of the
2021 is still likely to prove to be the worst year for increase in supply will determine levels of relief to
oil shipping freight rates since the recession of the tanker owners.
early 1990s.
Clean cargo
The energy analysts are positive about The export of product cargoes by Indian Oil PSUs
macroeconomic growth and oil demand growth does not happen on a large scale and Indian oil
in 2022 as traffic in major cities is almost back to companies mainly utilize their tonnage to move
pre-pandemic levels. Refiners are also reported barrels of clean products on the coast of India.
to have begun their peak season programmes as
demand in late October and early November 2021 Therefore, the Indian coastal trade is dominated by
was robust. time charterers which move clean products on the
coast of India. All Indian coastal trade is performed
Meanwhile, the LNG carrier market saw a positive on time charter vessels.
trend in 2021 driven by firm gas demand and long-
haul trades. The consumption levels for fuel in India are showing
some signs of recovery as the number of COVID-19
Crude imports into India cases have gone down. Compared to 2020,
The following quantities of Crude Oil were imported wherein people were not travelling much, 2021 has
by Indian PSUs over the last 2 years’ basis spot seen an exponential increase in air travel which in
trade information. turn has pushed the cross trade of jet fuel across
India. Thereby, pushing the product demand.

Crude The coastal tanker fleet which had experienced idle
oil Suezmax VLCC time in 2020 (either waiting for discharge due to
imports other issues or waiting for loading cargo) has been
2020 2021 2020 2021 entirely employed in 2021.
Average 2,402,667 1,808,909 2,379,833 2,740,000
(MT) In 2021, charterers are exercising their option for
Total 28,832,000 19,898,000 28,558,000 30,140,000 extension of Charter Parties, whereas in the previous
(MT)
year, vessels were released as there wasn’t enough
Demand for Crude (Imports) - 2020 coastal movement.
vis a vis 2021 Going ahead, as and when the COVID-19 fears ease
In the year, Indian PSUs have imported more crude off, we are positive that there will be an increase
on VLCCs than on the Suezmaxes. On a year on in the import of crude into India and increase of
year basis, the total crude imported on Suezmaxes coastal product movement.
through spot voyage chartering was down by about
20%. On the other hand, the total crude imported on
VLCCs through spot voyage chartering improved
by about 16%.

Overall, the levels of import of Crude oil on the spot
market was maintained with reference to last year. It
is expected that with Covid cases in India dropping

19