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The tanker market is – even more so than before – all about geopolitics.
The oil market is notoriously linked to geopolitics. Most recently, the political situation in Venezuela creates turmoil in the region and particularly affects crude oil exports.
Calling a market turnaround to perfection is pure luck. But scouting for pillars that would support a higher level of demand makes sense. First up is the next Brazilian soya bean export season.
The International Monetary Fund (IMF) has revised down its predictions for global growth in 2019 and 2020. It forecasts growth to be 3.5% in 2019 and 3.6% in 2020. This means a dampening of global growth over the next two years, as growth in 2018 is estimated to be 3.7% The slowdown will affect both advanced and emerging economies.
This article contains extracts from BIMCO's Reflections 2019, which will be available in full on 2 January 2019 on www.bimco.org and will be sent out to all BIMCO members alongside thier free member copy of BIMCO's Holiday Calendar 2019.
The continued severity of the tanker market conditions has made owners dig deep into the oversupply of capacity. Still BIMCO expects the tanker fleet to keep growing. A short-term rate recovery is not expected, as it is ‘maintenance season’ for the global refining industry in September and October.
The trade war and particularly the Chinese tariffs on imports of US soya beans can now clearly be seen with the start of the soya bean exporting period in the US.