Recently, affected by the Indian epidemic, the momentum of the oil shipping market's just recovery has declined. Data shows that the average revenue of Clarkson tankers has dropped from US$13,032/day at the end of March to US$6,846/day, a decrease of about 90%. The continuing epidemic has had a direct impact on India's domestic oil consumption demand. Data shows that the consumption of oil products in India fell to 17 million tons in April, the lowest level since September 2020.
In the long run, although the trend of the epidemic situation in India is still unclear, with the acceleration of vaccination in China, Europe and the United States, European and American countries have begun to gradually unblock them. The increase in travel volume has led to a gradual increase in oil demand, which is expected to make up for India's demand gap in the second half of the year. Global oil demand is expected to come out of the trough. Major oil-producing countries may continue to increase production, oil seaborne trade will accelerate, and the long-term improvement of the oil transportation market will remain unchanged.
In addition, as the dismantling of old oil tankers accelerates, the relationship between supply and demand in the oil transportation market is improving at an accelerated pace. Low freight rates have stimulated shipowners’ shipbreaking activities. Clarkson’s data shows that from January to April 2021, 12 crude oil tankers were dismantled with 1.1 million deadweight tons, which is close to the total dismantling volume of 2020; the dismantling volume of product oil tankers 23 ships with 970,000 dwt, exceeding the total dismantling volume in 2020. If the dismantling of old ships accelerates in the second half of the year, the relationship between supply and demand in the oil shipping market will continue to improve.