Panama Canal with new potential for the Suezmax tanker segment

By Finance

Panamax Canal expansion stated for implementation in 2015, is supposed to radically affect maritime trade, even though there is still doubt as to the chances it might entail for the tanker industry. According to its latest information, ship broker Gibson noted that the projected building of 2 new sets of locks, effectively making a 3rd traffic lane, is going to allow the passage of larger ships. Upon completion Suezmaxes are going to be able to transit the Panama canal with around 130,000 mt on board, limited only by the new draft restriction of 15.24 m.
Gibson Brokers noted that "with Asian appetite for crude from the Americas increasing, this supposes a chance for the Suezmax operator. Distances from Venezuela to Asia are considerably shorter via Panama than going via the Cape if the destination is anywhere north of Thailand; for example, Venezuela to Ningbo is twelve days shorter (basis twelve knots).. If the oil price is in step backwardation there might be an incentive for charterers to take the quicker itinerary. There are other possible scenarios, which may advantage the Suezmax option via Panama: for example, if VLCCs are trading at a strong premium to Suezmaxes and/or there is a lack of VLCC availability in the Americas. Also, if constraints limit the chance to accept a completely laden VLCC at the load/discharge ports, then the Suezmax via Panamamaybe a more attractive option. However, these are likely to be opportunistic situations at best; it is hard to believe such ‘Suezmax scenarios’ may exist on a constant (or even long term) basis. For these reasons, we all believe the VLCC option via the Cape is still going to typically to be the cheaper option and leave no room for a major upturn in Suezmax demand from the expansion of the Panama Canal" the Gibson shipbroker stated.