Transparency Market Research has released a new market report titled “ Crude Oil Carriers Market – Global Industry Analysis, Size, Share, Growth Trends and Forecast 2016 – 2024.” According to this report, the global crude oil carriers market was valued at US$160 Bn in 2015 and is projected to reach US$217 Bn by 2023 at a CAGR of 3.5% from 2016 to 2024.
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Crude oil carriers are designed for the bulk transport of crude oil. Basic types of oil carriers include crude oil carriers and product carriers. Crude oil carriers transport unrefined crude oil from exploration and production facilities to crude oil refineries, while product carriers ship refined products to points close to consuming markets. Coastal tank vessel trades are functioned by crude carriers, tank barges, and product tankers. Crude oil carriers serve the West/Alaska coast crude oil trades. Crude oil carriers are generally referred to as oil tankers which transport crude oil from one location to another.
Crude oil carriers are designed for the bulk transportation of oil. Crude oil carrier shipping provides a convenient way of transporting bulk liquid for international seaborne trade. Transportation rates in the shipping industry are determined by time charter equivalent. Oil tankers have become an integral part of the transportation process. In terms of exports, crude oil heads across the Atlantic to Europe, reducing North America’s dependency on crude oil from other regions, such as the Middle East.
The crude oil carriers market has been segmented on the basis of vessel type and region. In terms of vessel type, VLCC and ULCC together held about 63% share in 2015; a large number of VLCCs are in operation as compared to other vessels. Suezmax accounted for nearly 14% of the crude oil carriers market in 2015. Aframax accounted for nearly 21% and Panamax accounted for the rest 2% of the market.
Demand for crude oil carriers majorly depends on oil product consumers, crude oil production, and refining facilities. The cargo carrying capacity of a crude oil carrier is 90%–95% of its deadweight capacity, depending on the distance to the succeeding bunkering port. Long haul crude oil generates an incentive to build large-sized crude oil carriers. This is expected to lower the shipping costs through economies of scale up to the largest carrier such as ultra large crude carriers (ULCC). The international crude oil carrier fleet utilizes a classification system to establish shipping costs, standardize contract terms, and determine the capability of ships to travel to bunkering ports and through channels and certain straits. This system is known as Average Freight Rate Assessment (AFRA) system and was established by Royal Dutch Shell plc.
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AFRA system classifies crude oil carriers in terms of deadweight tons (DWT), a measure of a carrier’s capacity to carry cargo. A classification used to describe a large portion of the international crude oil carrier fleet is Aframax. Aframax vessels refer to crude oil carriers between 80,000 and 120,000 DWT. The international demand for oil from other countries has developed considerably faster than that from Organization for Economic Co-operation and Development (OECD) countries.