West coast Panama VLCC loadings are rising: Poten

An increase in Panama's west coast very large crude carrier (VLCC) loadings is giving shipowners who discharge crude on the US west coast more backhaul voyage options, according to a report by shipbroker Poten and Partners.

VLCC loadings on Panama's west coast, where nearly all Pacific coast Americas VLCC loadings occur, have ranged from three to six a month since July, compared with rising no higher than three in any month from January 2017 to July 2019, according to data cited by Poten.

Steady output from Colombia and rising production in Guyana, two countries that often ship their crude via the Trans-Panama Pipeline to the Pacific coast, are helping to boost demand for Pacific coast Panama VLCC loadings. Colombian or Guyanese crude often reaches Panama via Aframaxes or Suezmaxes.

"Because the export volumes in the area have increased in number and are now closer aligned with the import volumes, the VLCC market on the west coast of the Pacific is more balanced," Poten said. "This has changed the supply-demand dynamic for these vessels."

Instead of vessels having to ballast back to the Middle East or go around Cape Horn to pick up a cargo in the Atlantic, the rising Pacific coast demand in the Americas gives VLCCs backhaul options after they have delivered crude to refineries in California, according to Poten.

In 2020 and so far in 2021, all of Panama's VLCC export voyages went to China, said Poten.

The Pacific side of the Americas could go from a discharging option to a loading point for VLCCs where opportunities to load cargoes from more exporters have increased, according to Poten.

"We expect both imports and exports on VLCCs to grow in the coming years, making the west coast of the Americas a growing source of employment for VLCCs, both in terms of tons and ton-miles," Poten said.

By Liz Ramanand