Among increasing industrialization in advance as well as developing

Among the different types of tankers, oil
tankers have a large portion of tanker cargoes due to large quantities. From
oil tankers, about 80% of the demand for crude oil tankers while rest of 20%
are from product tankers. Concentration of world’s oil production and
consumption in different parts of the world has emerged a persistent demand for
oil tankers.

The World Economy
– Economic growth and industrial activity are highly affect for product tanker
industry. Developing economies such as Brazil, Russia, India, and China lead to
economic growth there by growth in GDP which directly affects merchandise
trading and seaborne shipments, so that product tankers.

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The shale
revolution make room for USA to emerge as a global crude oil exporter. This leads
to exporters from West Asia and West Africa to divert from North America
towards Asia new ton-miles for crude tankers. Demand for refined petroleum
products could continue to grow with increasing industrialization in advance as
well as developing economies.

Economic structure
– industrial activities and the processing of raw materials are
taking place in the countries producing
these resources. The oil refinery facilities have been built in crude oil producing countries. As a consequence,
demand for total seaborne trade becomes
higher in value and lower in volume. This increases the demand for refined products,
so that product tankers.

 

But the drop in the OECD
(Organization for Economic Co-operation) output was offset by increased
production in developing countries such as China and India. Instead of importing refined products, crude oil is imported and refined
in their refineries which leads to a dramatic decrease of demand for product
tankers in those countries.  

Also, increase of
oil price by major export countries leads to look for substitutions such as
coal and nuclear energy. As a consequence, structural changes in the European industries
leads to almost 40% reduction of crude oil in between 1990 and 2010 and in
Japan, oil imports were reduced by 16% between 1980 and 1990 offset by imports
of coal. These factors negatively affect for the demand of product tankers.  

Seasonal Cycles –
Kwak (2012) shows how tanker shipping is affected by seasonality in ways
similar to a consumption patterns. Summers are bear markets and winters are
bull markets. During summers, plants including refineries undergo maintenance
activities and Winter months are about consumption and restocking of supplies.
The pattern is similar across tanker shipping companies due to decline of
earnings by 30% to 50% due to idling or overcapacity during the summer months.