Guyana crude may support multiple tanker segments

Rising output from new Caribbean crude producer Guyana may support multiple segments of the crude tanker market as it ramps up production from current levels of 120,000 b/d.

"All large crude tanker classes could be in contention here, whether very large crude carriers (VLCCs) or Suezmax tankers heading east or Suezmax and Aframax tankers for delivery in the Atlantic Basin," Vortexa senior freight analyst Arthur Richier told Argus.

The extent to which Guyanese production will support the crude tanker market also depends on how much production will rise at its newly developed offshore oil field.

Crude production at the Stabroek block is projected to reach 750,000 b/d by 2026, according to ExxonMobil, which leads the consortium that operates the block.

So far in 2021, traders have loaded 13 vessels with Guyanese crude, 11 of which are Suezmaxes and two are Aframaxes, according to Vortexa data. One of the Suezmaxes is in floating storage.

Most of the Suezmax cargoes discharged at Chiriqui Grande, Panama, and the Aframaxes discharged at Port Neches, Texas.

"Guyana has good quality crude; it should be easier to sell than other types of crude in the market," Lenin H. Balza, specialist for the Infrastructure and Energy Sector at Inter-American Development Bank, told Argus. "There are many variables that we need to analyze to see how Guyana's oil production may affect crude exports from other countries."

One potential buyer of Guyanese crude is major crude consumer India, which is expected to gradually raise its share of imports from Atlantic basin suppliers, according to shipping research firm AlphaTanker. Such long-haul voyages would likely favor larger tankers such as Suezmaxes and VLCCs.

In 2020, traders loaded 28 tankers in Guyana; 22 of them were Suezmaxes, three were VLCCs and three were Aframaxes, according to Vortexa. The cargoes mostly arrived to the US, Caribbean, Panama and China.

Guyana's first ever cargo made its way to the US Gulf coast on 21 January 2020.

Guyana forecasts average crude production of 109,000 b/d in 2021, 47pc above last year but short of initial expectations because of a technical glitch.

By Liz Ramanand