The Houthi attack on ships in the Red Sea began last November with the Galaxy Leader ship (Reuters)

A Bloomberg report stated that two large oil tankers joined the global oil transport fleet during the current year, increasing this fleet at the slowest pace in about 4 decades.

According to the report, this increase in the number of tankers is 90% less than the annual average recorded since 2000.

But as owners began increasingly moving away from the southern Red Sea, the lack of new oil transportation capacity began to take its toll, as oil transportation prices increased dramatically, as did trip times, according to the report.

The Houthis attack ships passing through the southern Red Sea off the coast of Yemen, saying they are Israeli or heading to Israel, expanding the scope of the Israeli war on the Gaza Strip.

The attacks expanded to include British and American ships after the two countries began directing air strikes against the group.

After the two large tankers entered service this year, only 5 tankers are scheduled to be delivered in 2025, according to data from Banchero Costa Shipping Services, compared to 42 ships delivered in 2022.

Limited growth

The growth rate of crude tankers remained limited last year as OPEC and its allies maintained production restrictions last year. At the same time, the broader energy transition means eliminating fossil fuels, which leads to uncertainty for the industry’s long-term outlook, but increasing avoidance of the Red Sea has raised... The duration of oil transportation has already increased due to the Russian-Ukrainian war, according to Bloomberg.

While other commercial ships, especially container ships, began avoiding the Red Sea shortly after the attacks began in November, oil and fuel tankers were slower to do the same, according to Bloomberg.

But the matter changed, after American and British forces bombed Yemen in an attempt to stop the attacks. However, these attacks did not discourage the Houthis, but instead led to many of the world’s largest tanker owners moving away from the region, according to the report.

The agency quoted Enrico Paglia, research director at Panchero Costa Shipping Services, as saying, “The situation is difficult in the tanker market, especially for crude oil tankers... and it will be more difficult in the future.”

The shortage of tankers comes with the decline in the efficiency of the global fleet for transporting oil. In addition to many ships sailing through the Cape of Good Hope route instead of the Red Sea and the Suez Canal, the boom in the business of the dark transport fleet - which hides by disabling the automatic identification system of ships, or adopts practices... Deceptive shipping - means that many ships are only available to specific customers.

The shipping sector is known for its fluctuations. In 2020, when oil traders were storing it inside tankers at sea, the average tanker revenue increased to about $100,000 per day, before subsequent production cuts from the OPEC Plus alliance led to its decline for several subsequent years.

Change the substrates

Ship employment rates - a measure of how much a tanker fleet is being used at any given time - have increased by as much as 5% since ships began avoiding the Red Sea, according to Bloomberg, citing Fotios Katsoulas, principal tanker shipping analyst at Standard & Poor's Global.

Katsoulas added that the situation in the Red Sea “is changing the fundamentals of the market and is working in favor of ship operators... sentiment is much better now.”

Source: Bloomberg