Venezuela developments do not alter the balance

Venezuela has one of the largest proven crude oil reserves in the world. However, reserves are not a variable for shipping demand.

Demand for tankers responds to the barrels produced, exported and transported, not to the quantities remaining underground.

The qualitative characteristics of the country’s production limit the number of suitable refineries and usually favor destinations in the Atlantic with complex refining units.

Any increase in exports is therefore expected to be gradual and not of such a scale as to significantly alter the global supply balance in the immediate term.

In the long term, regarding tanker demand, even if Venezuelan barrels head to the US Gulf, boosting Aframax and Panamax employment, the oil that will be displaced from US refineries, like Canadian or Mexican, will also have to be exported to overseas markets.

Therefore, a decrease in tonne-mile demand should not be taken for granted at this stage, while any clear prediction would be premature.

In conclusion, the Signal Ocean analyst pointed out that under the current circumstances, tanker demand is mainly shaped by existing trade structures and price signals and not by the size of reserves or long-term development ambitions.