comment Edwin Lampert
the categories most likely to produce the highest levels of increase, according to a new survey by international accountant and shipping consultant Moore Stephens. This makes for sobering reading for tanker owners
V
in the present environment where freight rates remain challenging, especially in the crude segment. Paradoxically, crude oil demand is at all time highs and geopolitical unrest has further complicated the availability of crude oil and other products. Earlier this year Norden senior vice president of the tanker division, Lars Bagge Christensen told Tanker Shipping & Trade how turmoil in Libya has impacted the Mediterranean market, to the extent that it is performing substantially better than the market east of Suez. This is because the 1.8 million barrels/day, including refined product, normally exported from that country has had to be sourced from elsewhere. A closer examination of supply/demand fundamentals however reveals the fragile nature of this demand. As industry analysts Poten & Partners report in their upcoming study, Tanker Prospects 2012-2016, global growth in demand is being led by emerging countries and being hindered by the stuttering performance of mature economies. The International Energy Agency expects that combined crude oil consumption in the United States and the major
Tanker supply demands urgent attention
essel operating costs are expected to rise by 3.8 per cent in 2011 and by 3.7 per cent in 2012, with lube expenditure and crew costs identified as
European economies will reduce by 400,000 barrels per day by the end of 2011. This pattern will continue in 2012 with a further fall of 190,000 barrels per day. Much continues to rest on China. Last year it accounted
for 37 per cent of the growth in crude oil demand for 2010 and is forecast to account for about the same level of demand in the year ahead. Encouragingly, as the report makes clear, the diversification of crude oil sources and the increased participation of Chinese companies in global crude oil trade lends support to overall ton mile development. Scrapping prices continue to hold up. With age restrictions at terminals and tougher industry standards applying, operators of older double hull tonnage may be persuaded to exit the market. As Barry Luthwaite writes in this month’s Analysis feature: “Demolition in 2011 is claiming the highest number of tankers in seven years, boosted by prices paid by India and occasionally Pakistan that are, on average, in excess of US$520 per ldt. Such rates exceed present further trading values for tonnage built in the mid-1990s, especially for crude carriers.” A less obvious new market for tankers in 2012, suggested by Eddie Bucknall, technical director, Columbia Shipmanagement, elsewhere in this issue could be in the transport of water as an alternative to the installation of ballast water plant. “A lot of tankers go to dry countries and Qatar Gas, with their 18 LNGs, is looking to transport fresh water out of Zeebrugge to the Middle East.” TST
Armed guards given cautious welcome
The mood music in government circles is changing on piracy. Speaking at the International Chamber of Shipping International Conference in September, EU Navfor chief of staff Captain Keith Blount said that the the option of taking pirates out at source, that is to say when they set up their base camps on the beaches, is being debated, at the highest political and military levels. Successive European governments have also
ratified the use of armed guards. The UK government has announcement that UK registered ships will be allowed to carry armed guards. Industry union Nautilus International believes that
there are still ‘questions to be asked and concerns to be address, notably around the liabilities of masters
and officers in the event of something going wrong, or the problem of flag states, coastal states and port states facilitating the carriage of weapons onboard. The union has previously stated its preference for military Vessel Protection Detachments (VPDs) rather than privately contracted security operatives. Capt Blount is an advocate of VPDs. “We need to
lobby nations to allow it. It would free tremendous military flexibility to go and do the work the world would like the military to get on and do.” He also raises the importance of armed security
firms liaising closely with navies. In a hijack situation it may be difficult to differentiate them from the pirates themselves.
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Tanker Shipping & Trade I October/November 2011 I 3
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