Why China Remains So Important for the Crude Tanker Industry

China’s impact

China, which has the second-largest economy in the world, also has a significant impact on the crude oil tanker industry. It imports 60% of the oil it needs. Most of that oil travels by sea using crude oil tankers, especially VLCCs (very large crude carriers).

Why China Remains So Important for the Crude Tanker Industry

Navios Maritime Midstream Partners (NAP) operates six VLCCs, and Tsakos Energy Navigation (TNP) operates three. Euronav (EURN) has 43 VLCCs in its fleet, and DHT Holdings (DHT) has 27. Nordic American Tankers’ (NAT) fleet doesn’t include any VLCCs.

We’ve seen a distinct trend so far this year: China’s oil production is falling while its oil demand is increasing. This trend is expected to continue into 2019. It should increase China’s oil imports, which benefits crude oil tankers.

China is the largest manufacturing hub in the world. A country’s oil demand relates to its manufacturing activities. Higher manufacturing activity translates to higher oil demand, while higher oil demand means higher tanker demand.

A country’s oil demand is closely related to its gasoline demand. China is a leading car manufacturer. In many ways, China is the key country for the tanker industry.

Series overview

In this series, we’ll see how China’s crude oil imports fared in May. We’ll also gauge China’s oil demand through the manufacturing industry’s performance and auto sales in May.