Ras Tanura port sees a decline in congestion for dirty tankers despite a sharp rise in port days, raising concerns about potential freight market impact.
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This week’s focus highlights a decrease in vessel congestion at the port of Ras Tanura for dirty tankers, including VLCCs and Suezmax vessels. Port congestion metrics show a 25% decline on both a weekly and monthly basis. However, in contrast, port days metrics have recently risen by 25% on a weekly basis and by a significant 177% over the past month. The key question remains whether this increase in port days will lead to a subsequent rise in vessel congestion, potentially putting upward pressure on freight market momentum.
This week’s focus highlights a notable decrease in vessel congestion at the port of Ras Tanura, specifically for dirty tankers, including VLCCs and Suezmax vessels. Port congestion metrics show a 25% decline both on a weekly and monthly basis, signalling improved traffic flow. However, a contrasting trend emerges when examining port days metrics, which have surged by 25% on a weekly basis and a dramatic 177% on a monthly basis. This sharp rise in port days suggests vessels are spending significantly more time in port, likely due to operational delays or extended loading periods.
The relationship between these metrics is crucial. While congestion has eased in terms of vessel count, the rise in port days could indicate inefficiencies or bottlenecks at the port that could eventually result in a build-up of vessels. Should this trend persist, it may lead to an increase in vessel congestion for dirty tankers, exerting upward pressure on freight rates due to tighter vessel availability. This dynamic could shift the freight market momentum, particularly if demand for cargoes out of Ras Tanura remains robust and vessel supply remains constrained. The market will closely watch whether the extended port stays translate into longer-term congestion and higher freight rates for dirty cargoes in the coming weeks.
Meanwhile, the final week of October is closing with firmer momentum in VLCC freight rates on the AG-China route, despite underlying concerns about future demand, as projections for Chinese oil demand remain sluggish.
The International Energy Agency’s (IEA) latest Oil Market Report for October has tempered expectations, forecasting a global oil demand increase of just 862,000 barrels per day (bpd) this year. This represents a downgrade from the 903,000 bpd increase projected in the previous month's report. The deceleration is largely driven by weaker consumption growth in China, which has been a key driver of the global oil market in recent years. Concerns about China’s economic recovery, ongoing restrictions in key industrial sectors, and a pivot toward renewable energy may be contributing to the softer outlook.
Given China’s significant role in shaping VLCC demand on key crude oil trade routes, the IEA’s downgrade raises questions about the longer-term outlook for VLCC freight rates. While the short-term momentum appears strong, any sustained weakness in Chinese demand could weigh on future rate increases, particularly if vessel availability remains robust or newbuild deliveries increase supply.
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Creating a sustainable world requires us to embark on a journey towards a zero emission future, where every step is a commitment to preserve our planet for future generations.
Albert Greenway
Environmental Scientist, Sustainability Expert
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Increased Use of Renewable Energy:
Shipping companies are embracing renewable energy sources to power onboard systems and reduce emissions during port operations. Solar panels and wind turbines are being installed on vessels to generate clean energy, reducing reliance on auxiliary engines, and cutting down emissions. Shore power facilities in ports allow ships to connect to the electrical grid, eliminating the need for onboard generators while docked.
Collaboration and Industry Partnerships:
Recognizing that addressing emissions requires collective action, shipping companies, governments, and organizations have formed partnerships and collaborations. These initiatives focus on research and development, sharing best practices, and promoting knowledge transfer. Joint projects aim to develop and deploy innovative technologies, improve infrastructure, and create a supportive regulatory framework to accelerate the industry's transition towards a greener future. The Zero Emission Shipping - Mission Innovation.
To pave the way for a greener future in shipping, the availability of alternative fuels plays a vital role in their widespread adoption. However, this availability is influenced by factors such as port infrastructure, local regulations, and government policies. As the demand for cleaner fuels in shipping rises and environmental regulations become more stringent, efforts are underway to improve the accessibility of these fuels through infrastructure development, collaborations, and investments in production facilities.
Liquefied Natural Gas (LNG) infrastructure has seen significant growth in recent years, resulting in more LNG bunkering facilities and LNG-powered vessels. Nonetheless, the availability of LNG as a marine fuel can still vary depending on the region. To ensure consistent availability worldwide, there is a need for further development of LNG supply chains and infrastructure. For biofuels, their availability hinges on production capacity and the availability of feedstock. Although biofuels are being produced and utilized in various sectors, their availability as a marine fuel remains limited. Scaling up biofuel production and establishing robust supply chains are imperative to ensure wider availability within the shipping industry.Hydrogen, as a fuel for maritime applications, is still in the early stages of infrastructure development. While some hydrogen vessels have been tested or introduced in the first quarter of last year, the infrastructure required for hydrogen production and distribution needs further advancement.
Ammonia, as a marine fuel, currently faces limitations in availability. The production, storage, and handling infrastructure for ammonia need further development to support its widespread use in the shipping industry.Methanol, on the other hand, is already a commercially available fuel and has been used as a blend with conventional fuels in some ships. However, its availability as a standalone marine fuel can still be limited in certain regions. Bureau Veritas in October 2022 published a White Paper for the Alternative Fuels Outlook. This white paper provides a comprehensive overview of alternative fuels for the shipping industry, taking into account key factors such as technological maturity, availability, safety, emissions, and regulations.
Creating a sustainable world requires us to embark on a journey towards a zero emission future, where every step is a commitment to preserve our planet for future generations.
Albert Greenway
Environmental Scientist, Sustainability Expert
Increased Use of Renewable Energy:
Shipping companies are embracing renewable energy sources to power onboard systems and reduce emissions during port operations. Solar panels and wind turbines are being installed on vessels to generate clean energy, reducing reliance on auxiliary engines, and cutting down emissions. Shore power facilities in ports allow ships to connect to the electrical grid, eliminating the need for onboard generators while docked.
Collaboration and Industry Partnerships:
Recognizing that addressing emissions requires collective action, shipping companies, governments, and organizations have formed partnerships and collaborations. These initiatives focus on research and development, sharing best practices, and promoting knowledge transfer. Joint projects aim to develop and deploy innovative technologies, improve infrastructure, and create a supportive regulatory framework to accelerate the industry's transition towards a greener future. The Zero Emission Shipping - Mission Innovation.
To pave the way for a greener future in shipping, the availability of alternative fuels plays a vital role in their widespread adoption. However, this availability is influenced by factors such as port infrastructure, local regulations, and government policies. As the demand for cleaner fuels in shipping rises and environmental regulations become more stringent, efforts are underway to improve the accessibility of these fuels through infrastructure development, collaborations, and investments in production facilities.
Liquefied Natural Gas (LNG) infrastructure has seen significant growth in recent years, resulting in more LNG bunkering facilities and LNG-powered vessels. Nonetheless, the availability of LNG as a marine fuel can still vary depending on the region. To ensure consistent availability worldwide, there is a need for further development of LNG supply chains and infrastructure. For biofuels, their availability hinges on production capacity and the availability of feedstock. Although biofuels are being produced and utilized in various sectors, their availability as a marine fuel remains limited. Scaling up biofuel production and establishing robust supply chains are imperative to ensure wider availability within the shipping industry.Hydrogen, as a fuel for maritime applications, is still in the early stages of infrastructure development. While some hydrogen vessels have been tested or introduced in the first quarter of last year, the infrastructure required for hydrogen production and distribution needs further advancement.
Ammonia, as a marine fuel, currently faces limitations in availability. The production, storage, and handling infrastructure for ammonia need further development to support its widespread use in the shipping industry.Methanol, on the other hand, is already a commercially available fuel and has been used as a blend with conventional fuels in some ships. However, its availability as a standalone marine fuel can still be limited in certain regions. Bureau Veritas in October 2022 published a White Paper for the Alternative Fuels Outlook. This white paper provides a comprehensive overview of alternative fuels for the shipping industry, taking into account key factors such as technological maturity, availability, safety, emissions, and regulations.
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