A panel of experts at the annual Tanker Shipping and Trade Conference in London were divided on their predictions for the future, but some feel the market is on the verge of a shift.
Faced with the question of whether the current market is a charterers or a shipowners market, DNV-GL's business development manager for Western Europe and Africa Martyn Crawford-Brunt demurred, saying the only certainty was that the future was uncertain.
Braemar Shipping Servics president Denis Petropoulos said it the market doesn't particularly favour shipowners or charterers. “This is a normal market. Do we have a spike or a peak coming round the corner? Well, we probably do,” he said.
Norton Rose Fulbright's global head of transport Harry Theochari reframed the question to examine who actually owns the fleet, pointing out there has been a significant drop in financing for the tanker industry – from US$140Bn in 2007 to US$50Bn in 2007 – as well as a substantial shift in financing and debt ownership from traditional banks to private equity firms.
“A huge part of the market is owned by private equity,” Mr Theochari said. “These people see the industry very differently.”
“In the past three months, I have done more forward trading of heating oil than ever before [for private equity investors],” he said “These people obviously know something we don't.”
Mr Petropoulos disagreed slightly, confirming the view that private equity investors will want a return on their investment but that they would stay in the market for the long term in order to ensure the return was realised.
While individually the panel varied on specifics, as a whole, they painted a picture that reinforced Mr Crawford-Brunt's sentiment: unpredictability is the future of the market.
After an in-depth look at orderbook numbers, director for Richardson Lawrie Associates Charles Lawrie saw some signs of life for the market.
“Everything still depends in both sectors on the delivery schedule, but on both counts, I think we're seeing some revival,” he said.
Again, Mr Petropoulos saw things differently.
Looking at ways to ensure 2018 would outperform 2017, the shipowner said “We're not particularly positive for 2018. We think the overtonnage and oversupply is going to hang around,” he said.
Mr Petropoulos spoke as part of a panel addressing tanker business, economics and strategy. Other members of the panel included Norton Rose Fulbright's global head of transport Harry Theochari, DNV-GL's business development manager for Western Europe and Africa Martyn Crawford-Brunt and director for Richardson Lawrie Associates Charles Lawrie.