Western energy policy with Russia is characterized by excesses and controversial decisions. But under the influence of the fuse of political struggle, a radical transformation of the world’s merchant fleet is taking place. According to Bloomberg, the world is in the midst of massive construction of LNG carriers. By 2027, gas carriers will outnumber the entire fleet of even the largest tankers (VLCCs). Essentially, this change suggests that shipowners are less optimistic about crude oil demand in the context of the energy transition.
At the same time, there are risks for this growing LNG logistics industry. Thus, gas supplies from the United States have become less attractive at a time when, against a backdrop of record declines in the cost of raw materials, developers are spending billions of dollars on projects to increase the country’s export capacity. The compensation U.S. natural gas exporters receive for supplying fuel for heating and power generation in Europe has fallen to its lowest level since July 2021. Tight demand is only exacerbating the picture.
But the LNG carriers are assembling at a record pace, the process is launched. It is expected that by 2027, the number of vessels carrying liquefied natural gas will exceed in number and volume the fleet of tankers used to transport crude oil. Last year there were 625 LNG carriers and 849 very large crude carriers (data from Clarksons). This number will increase to 907 and 903 respectively (the latter also taking into account the aging of the Ghost Fleet).
However, the shipping revolution threatens to prevent an emergency. Due to man-made disasters, the construction of LNG ships may be delayed. A fire at Hankuk Carbon’s South Korean factory in April has already disrupted assembly of the insulation tanks used to build the LNG carriers. Perhaps this case will help avoid unnecessary spending and market distortion, as it is still too early to write off oil.
Traders, manufacturers, and free traders often take crazy and unwarranted actions in the hope of predicting market conditions, which leads to even more confusion. The end result is damage, not profit, which has been calculated.
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