“In a possible sign that the unwinding of OPEC+ production cuts could increase seaborne volumes, the combined crude tanker loadings of OPEC countries has jumped 24% week-on-week to 2.281 million barrels per day (mbpd) in week 23, the bloc’s highest weekly loadings since April 2023,” says Niels Rasmussen, Chief Shipping Analyst at BIMCO.
Despite the increase, it is too early to conclude that this is a sign of things to come, especially since weak Chinese and Indian demand has caused global year-to-date volumes to end 3.6% short of last year's volumes. It is also worth noting that freight rates have not responded to the increasing volumes though there is an indication that ship supply in the Persian Gulf was unusually high during week 23.
At the same time, the agreed OPEC+ production increase of 0.138 mbpd and 0.411 mbpd in April and May respectively did not result in any noticeable jump in OPEC volumes. However, the further 0.411 mbpd increase in production planned for both June and July could be the catalyst that lifts volumes above last year and provides the much-needed support for the crude tanker sector.
“Year-to-date, seaborne crude oil volumes have been negatively impacted by increased global uncertainty as the US increased import tariffs. While US policies have not fundamentally changed, many countries have been offered a 90-day respite on reciprocal tariff increases and China and the US have agreed to a framework agreement to restore normal trade relations. This offers a glimmer of hope that uncertainty may recede from year-to-date highs and be less of a drag on oil demand for the rest of the year,” says Rasmussen.
Even if that hope fades, the increased OPEC+ production and lower oil prices may still provide future support for crude tankers. Since early April, Brent has consistently been priced below USD 70/barrel and has recently hovered around USD 65/barrel. The U.S. Energy Information Administration (EIA) forecasts that prices will continue downwards and reach around USD 60/barrel in late 2025.
The lower prices would likely support oil demand and drive an increase in global oil inventories that could further support seaborne volumes. Recently, the International Energy Agency (IEA) estimated that global inventories would increase by 0.72 mbpd during 2025.
“While it remains too early to conclude that week 23 loadings are a sign of things to come, we are hopeful that a combination of increased oil production, lower prices and increasing inventories can help lift freight rates from current lows. Should OPEC crude oil volumes remain higher than year-to-date, VLCCs stand to benefit the most as they carry 70% of the seaborne exports,” says Rasmussen.
