Global Crude Oil Carriers Market: Snapshot
Crude oil can be transferred from production spots to refineries by using crude oil carriers. Other means of transporting them are rail tank cars, pipelines, barges, and tank trucks. Crude oil carriers, better known as oil tankers in common parlance, deliver crude oil in bulk from one location to another. Perfect competition prevails at present in the global crude oil carriers market on account of numerous providers of similar shipping services, absence of strict rules, and most importantly information on freight rates on the Baltic Index.
In order to further their positions in the global crude oil carriers market, savvy players are coming up with improved transportation technologies and carrier models. This has served to catalyze growth in the market. Further, ship owners have proper procedures in place to ensure secure and environmentally responsible operations and this is also upping demand in market.
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A factor posing a roadblock to the global crude oil carriers market, on the other hand, is the massive initial investment needed to acquire brand new and even second hand carrier ships. This has particularly hampered many aspiring players from foraying into the market.
A report by Transparency Market Research predicts the global market for crude oil carriers to expand at a tepid CAGR of 3.5% during the period between 2016 and 2024 to become worth US$217 bn by 2023 from US$160 bn in 2015.
VLCC and ULCC Together Account for Dominant Share
The two main kinds of oil carriers are crude oil carriers and product carriers. Crude oil carriers, typically, transfer unrefined crude oil from exploration and production facilities to crude oil refineries. Product carriers, on the other hand, ship refined products to points close to consuming markets. Coastal tank vessel trades are carried out using crude carriers, tank barges, and product tankers. Crude oil carriers serve the West/Alaska coast crude oil trades.
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Depending upon the type of vessels, the global crude oil carriers market can be segmented into Suezmax, VLCC/ULCC, Aframax, and Panamax. Of them, the combined share of VLCC and ULCC was about 63.0% in 2015 mainly on account of a significant number of VLCCs operating. In 2015, these two large carriers are said to have transported worth over US$90,000 a day to Asia Pacific. Crude oil carriers are also treated as a medium of floating storage by some energy traders and companies stored wanting to hedge against higher future price.
Aframax held about 21.0% share in the global crude oil carriers market in 2015. Suezmax accounted for nearly 14.0% and Panamax accounted for the rest 2% of the market.
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Powered by China and Japan, Asia Pacific Dominates Market
Depending upon geography again, the global crude oil carriers market can be segmented into Europe, Asia Pacific, North America, and the Rest of the World. Of them, Asia Pacific accounted for share of 41.0% in 2015. This is because, many countries in Asia Pacific, namely South Korea, China, Malaysia, and Japan, own and operate most of the crude oil carriers. Crude oil from West Africa and South America is mainly transported to Asia Pacific, owing to lesser demand from the U.S. which has been witnessing a boom in shale oil and gas and hence requires lesser crude oil.
Europe is another key market for crude oil carriers, in which Greece is said to have owned and operated almost 17.0% of the worldwide crude oil carriers in 2015.