Do You Need to Clean Up Your Act? (March 14, 2014)
One critical decision a shipowner faces when ordering an Aframax is whether or not to coat the vessel’s tanks to allow for clean refined product carriage. In the few years leading up to the market peak in 2008, anticipation and excitement for long-haul refined products trades gained momentum. New refineries to be built in the Middle East would forever change the commercial landscape of the tanker market. Refined product ton-miles would grow to the detriment of the crude oil trade. The onset of the financial crisis forced companies looking at investment in, or expansion of, refineries to pump the brakes on such ideas. With worldwide petroleum demand in question, the sense of urgency for refining projects quickly dissipated. Eventually, worldwide fuel demand growth was restored, but many of the proposed refining projects were not. With an ever-changing outlook, the long-haul product market continues to be shrouded with uncertainty. The question remains not when, but if, large scale export refineries will ultimately turn on their boilers.