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OIL TRADES RECOVER STEP BY STEP
During the past seven years, growth rates in crude- and product-trades decreased significantly (see graph below showing Clarkson's 'Monthly Global Seaborne Oil Trade Indicators'). The growth rate for trades in oil products (light blue line) reached its trough in spring 2020 when the COVID-19 pandemic caused oil product demand to shrink strongly. The growth rate for trades in crude oil (dark blue line) reached its low half a year later in autumn 2020 as OPEC decided to cut oil production. Meanwhile, oil product trades have recovered sharply with y-o-y growth rates jumping to nearly 15% lately. Crude oil trades improved as well, however, growth has remained negative. Given the strong increase in product demand, we expect crude oil demand to recover in the near future as well.
Interestingly, our product tanker index gained 14.4% last week, showing some signs of life after a long period of lackluster interest for this sector. The product sector saw another meaningful development when Navios Maritime Partners announced its intention to merge with its sibling Navios Maritime Acquisition Corp. The latter was challenged by an upcoming maturity event which now will be mitigated once the announced merger is executed. Consequently, after such an announcement, Navios Maritime Acquisition's share price surged by nearly 75% within one day. The newly formed Navios Maritime Partner will offer institutional investors an interesting platform to invest in a broadly diversified shipping company.
Overall, it seems that investors are rebuilding some trust in the shipping sector. We would not be surprised if our 'Notos Shipping Index' reached 2,000 index points in a couple of days.
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