In the last decade, the patterns of growth in the global oil products market have changed considerably. Despite the recession that has torn through the global economy since 2008, seaborne product imports have continued grow, with trade volumes projected to reach 18.7m bpd in full year 2012, an increase of 15.7% since 2007. However, where this growth has occurred has caused substantial shifts in the product tanker  market.
Rockin All Over the World
The Graph of the Month demonstrates that in 2002 trade volumes were dominated by the OECD, the destination of 67% of global seaborne products in that year. Between 2002 and 2007, volumes of oil products increased by 41%, as a boom in the economies of the OECD was coupled with a surge in demand in China. As a result, the three key product tanker sectors, Handy, MR and LR, all enjoyed strong growth in dwt demand (71%, 47% and 66% respectively). However, this situation began to change as the recession started to be felt.
Go East (and South), Young Man
After 2008, non-OECD oil demand became the driving force within the tanker market. In the MR sector, dwt demand on Intra Far East trade routes rose by 6% between 2008 and 2011, as the ramp up of refinery capacity in the East, particularly China and Singapore, helped to expand intra-regional trade between the developing regions of Asia. Elsewhere, MRs also benefited from both the increase in demand from Latin America, with dwt demand on routes from the US to South America projected to reach 6.8m dwt in 2012, an increase of 238% between 2007 and 2012. By contrast, the Handy sector’s exposure to intra-European demand, and the difficulty of attracting cargoes on emerging routes to non-OECD countries, led to dwt demand for this sector declining by 17% between 2008 and 2011.
Bigger the Better
Elsewhere, LR1 and LR2 vessels also saw an increase in dwt demand as charterers looked to maximise savings through economies of scale. Despite weak sentiment in much of the region, LR demand on the Intra Baltic, Med and UKC routes is projected to have increased by 54% between 2008 and 2012. Furthermore, LR2 vessels are projected to take advantage of emerging long-haul trades, in particular from the Caribbean to the Far East, with demand on this route projected to have increased by 48% between 2008 and 2012 helping to absorb tanker tonnage.
Ultimately, the emergence of non-OECD countries as the drivers of seaborne product import growth significantly impacted on the tanker market. Looking ahead, these trends are likely to continue as the Eurozone crisis continues and US domestic demand remains sluggish. Oil products and tanker demand growth will continue to be dependent on demand from non-OECD economies, as Asia and South America continue to industrialise. Consequently, product tanker demand growth will be driven by the emerging long and short haul routes to non-OECD countries, which is projected to benefit the MR and LR sectors to the greatest degree.





























Source: Clarkson Research Services