Crude oil volumes carried by oil tankers fell by 18.6% in July 2020 compared to July 2019, according to Maritime Intelligence firm, Lloyd’s List Intelligence.
The report by the firm recorded ton-mile demand, which measures volumes carried by distance travelled, and is seen as a proxy for demand for crude tankers. The report showed that the OPEC cuts to record production lows resulted lower oil tanker movement.
The report also showed that the fall in tanker numbers for the month of July is the lowest it has been since the pandemic started, heavily affected by falling demand for tankers from the Middle East oil-producing states, especially with the extra voluntary production cuts from key members.
“Global crude tonne-mile demand plunged by 18.6% in July to 8.17trn miles compared to the same period last year, according to data compiled by Lloyd’s List. June was 11.1% lower month on month,” Michelle Wiese Bockmann, Markets Editor at Lloyd’s List wrote.
“The steepest falls over June and July were recorded from the Middle East and West Africa, which rely on mostly on very large crude carriers and suezmaxes to export crude to destinations primarily in Asia, Europe and the US.
“Preliminary August data suggests that month-on-month drops in global tonne-mile demand will be of the same magnitude as July,” the report said.
In the meantime, the report noted that Saudi Arabia’s demand for oil tankers is expected to remain flat, even as OPEC reduces production cuts from 9.6 million to 7.7 million barrels.
Saudi Arabia had announced last month that it plans to keep its oil exports for the month of August the same with July, as it would be using more on local demand for electricity generation.
During the events that led to the oil price crash pre-OPEC cuts in March, Saudi Aramco booked oil tankers in bulk in a bid to flood the market and fight Russian competition for crude oil.