The forecast period up to 2027 suggests a mixed outlook across different vessel types. We anticipate that orders for Bulkers and Tankers will gain momentum, while demand for Containers and LNG/LPG vessels will decline. Despite the expected rise in Bulker and Tanker orders, the overall orderbook will likely shrink due to a surge in deliveries for Container and Gas vessels.

Geopolitical tensions, such as the Houthi attacks in the Bab Al Mandeb Strait, are creating both risks and opportunities for shipping. The rerouting of vessels has supported various shipping segments, bu the volatile nature of the conflict introduces significant uncertainty. A sudden halt in attacks could negatively impact shipping, while prolonged disruptions could offer upside potential.

Additionally, the global economic landscape remains uncertain due to geopolitical conflicts, sanctions, and trade wars, which could affect demand. The recovery of China’s economy—crucial for global trade—is also unstable, and high interest rates in Western economies increase the risk of a potential recession, which could delay future growth.

Here’s a summary of how this uncertainty could play out across tankers, bulkers, containers, and gas industries based on our forecast data.

Tankers

Volatility in rates and expectations will continue with movements in the oil price, Russian volume developments, preemptive measures in the Red Sea, OPEC+ decisions and members’ compliance as well as China’s ability to maintain economic growth, high crude imports and refinery runs.

We expect Russia oil exports to continue to decline, with Europe sourcing from suppliers further afield such as MEG, US and Latin America and this will continue to support ton mile demand and therefore rates going forward.

Tanker ordering activity has continued at a relatively strong pace in 2024, already equaling order activity seen in 2023 at 36 mil DWT, levels not rivalled since 2017. The delivery schedule for 2024 is low, however, will gain pace in 2025 and onwards. The total Tanker orderbook to fleet ratio, currently at 12%, has been increasing through 2023 and 2024.

Ton-mile demand expectations in 2024 and beyond remain strong in our current Base Case for both crude and product carriers, following negative developments in both 2020 and 2021. A key factor for stronger growth will be the recovery of oil demand in China, without being hindered by rising global oil prices.

With no remedy in sight for the Houthi aggression in the Red Sea we expect that the positive impact of sailing longer distances to avoid risk areas in the Red Sea will continue. However, should the risk abate and be deemed acceptable to the industry with ships again returning to the Suez Canal, the market will likely face a downward correction.
Source: Veson Nautical