As far as the tanker market was concerned in December 2021, it remained surprisingly weak. Market rates were around $ 8,000 per day – certainly a doubling compared to early fall 2021, but still well below what an MR-vessel requires to even reach break-even. The same applied to crude oil tankers, such as Suezmax.
Will the market improve?
However, there is light at the end of the tunnel. The rising demand for oil and a gradual increase in oil production in recent times have led to a slightly increased activity, especially in the crude oil segment.
“If we look at the development of the market, we can state that global demand for oil continues to increase at a rapid pace. Production has also increased, but not at the same rate. The imbalance between consumption and production has led to continued withdrawals from warehouses near the countries of consumption – which is one of the main reasons for the weak tanker market”, states Kim Ullman, CEO of Concordia Maritime in December 2021.
The imbalance that now characterises the market is not sustainable in the long term. Oil consumption is expected to continue to increase and is likely to return to pre-covid levels in the beginning of 2022. And with increased production comes increased shipping needs.
What about sustainability?
Tanker business is likely to increase or at least stabilise in the next few months. At the same time, everyone is talking about phasing out fossil fuels. How does it play in reality?
“If you look at global consumption today, there are no indications of crude oil being phased out in the next ten years. In 30 years, we may have a smaller consumption, but there will still be a need for fossil fuels. Tanker companies must adapt and move with the times”, says Kim Ullman.
“For us at Concordia Maritime, it is most important to continue to serve our customers in our segments and to continue to be one of the leaders in these segments. We make sure to maintain a level of technological advancement and a level of commercial and operational professionalism that such a position requires. Of course, this also includes being a leader when it comes to sustainable development”.
In times of change
Concordia Maritime is operating globally and in times of change. Even within the company, there are some changes on the way as Erik Lewenhaupt will take over as the new CEO as of January 1st 2022.
Kim Ullman has been both influential and instrumental in several crucial transactions. In addition to his position as Deputy CEO of Stena Bulk for many years, Kim has also been CEO of Stentex, responsible for the Stena Bulk office in Houston and then CEO of Stena LNG and Stena Weco. For the past eight years, he has been the CEO of Concordia Maritime.
Erik Lewenhaupt started his tank career at Nordström & Thulin in 1996 and was then employed by Stena Bulk, where he was head of chartering in both Gothenburg and Singapore. Erik’s most recent position has been as sustainability manager at Stena Line, where he has made a significant contribution to making Stena’s ferry shipping one of the most sustainable operations in the transport sector.