Fitch ratings in a recent report has projected flat growth trends for the global tanker business in 2019. While overcapacity has been cited as a major factor for the projected flat trends, low oil demand is also expected to keep the tanker business in a subdued mood in the new year.
“Potential overcapacity weighs on the tanker sector. We forecast net tanker capacity to grow at about 3%, up from about 1.5% in 2018. The sector may face downside risks from oil demand and supply. US Energy Information Administration (EIA) forecasts global oil consumption in 2019 to rise 1.4%, down slightly from a 1.5% increase in 2018. The impact of US sanctions on Iranian crude oil exports as well as OPEC’s decision on production volumes in December meeting are likely to affect oil supply and, as a result, demand for tankers,” the report said.