Oil tankers specially designed for shipping petroleum liquids such as crude oil, called oil carriers, are an integral part of the bulk transportation of petroleum products across international seaborne routes. The global crude oil carriers market is thus a multibillion-dollar industry; it had a valuation of US$160 bn in 2015. A recent market research report published by Transparency Market Research states that the market will expand at a 3.5% CAGR over the period between 2016 and 2024. As a result, the market will rise to a valuation of US$217 bn.
A variety of factors play an important role in shaping the demand dynamics of crude oil carriers on a global front. The demand is majorly decided by consumption of oil products in the global market, production of crude oil, and availability and location of refining facilities.
High Demand from Storage Facilities Propelling Market
In 2015, the record low crude oil prices accelerated the oil carriers business owing to the huge demand for low-cost oil in countries such as China. Along with the accentuated demand from crude oil storage facilities, the global market for crude oil carriers also benefitted as some energy traders and companies used carriers as a medium for floating storage during this period, with hopes that future prices will be higher than the spot prices.
China Leads Market despite Slowing Economy
On a geographical front, the global crude oil carriers market benefits the most from the demand in Asia Pacific, especially from China, despite the slow economic growth. In 2015, Asia Pacific held a dominant share of over 41% in the global crude oil carriers market. Numerous countries in Asia Pacific, such as South Korea, China, Malaysia, and Japan, possess and operate a major share of the crude oil carriers in the global market. In Europe, Greece is a major hub for the crude oil carriers market, with the Mediterranean nation operating 17% of all crude oil carriers in the world.
VLCC and ULCC Account for More than Half of Global Market
The key varieties of crude oil carrier vessels in the global market include VLCC and ULCC (very large crude carriers and ultra large crude carriers), Suezmax, Panamax, and Aframax. Of these, the segment of VLCC and ULCC dominated the market, accounting for over 63% in 2015. On a global front, a vast number of VLCCs operate as compared to other vessel types. The segment of Suezmax accounted for a 14% share in the market, while Aframax held a share of nearly 21% in the market in 2015. The segment of Panamax held only a share of about 2% share of the market in the same year.
Several vendors are instrumental in shaping the competitive landscape of the highly competitive global market for crude oil carriers. Some of these companies are Alfa Laval Inc., China Shipping Development Corp (CSDC), Bahri, AET, Euronav, Maran Tankers Management Inc., Dynacom Tankers Management Ltd., Frontline Ltd., National Iranian Tanker Company, OMAN SHIPPING COMPANY S.A.O.C., Overseas Shipholding Group (OSG), NYK line, Ocean Tankers (pte) Ltd., Teekay Corporation, and Sovcomflot Group.
Source: Transparency Market Research