Belgian oil tanker and storage operator Euronav has flagged rising demand from China after it reported better-than-expected fourth-quarter sales driven by large crude tanker recovery and good seasonal demand for crude.
One of the largest oil tanker companies in the world, Euronav said it saw stronger oil demand from China following the Lunar New Year holiday and the lifting of COVID-19 restrictions in early January.
“We are very optimistic about the fact that the economy will grow massively compared to the previous quarter,” De Stoop said in a call with analysts.
The tanker market, which had battled low earnings since the pandemic first hit oil demand, got a boost last year as Russia diverted oil exports from Europe, mainly to Asia, after many Western buyers turned to other suppliers following Moscow’s invasion of Ukraine.
“The EU embargo on Russian oil … created additional shipping demand as crude trading patterns required longer voyages and therefore captured more shipping capacity,” Chief Executive Hugo De Stoop said in a statement.
The European Union in December banned companies and individuals in the bloc from providing financing, brokerage, shipping and insurance services to ship Russian oil elsewhere if the crude was bought above a price cap of $60 a barrel.
“The Russia-Ukraine conflict has pushed up ton-miles and consequently tanker rates. We expect Euronav’s average earnings to increase accordingly,” KBC Securities said in a note.
Euronav posted a profit of $234.7 million in the final quarter of 2022, against a loss of $72.2 million a year earlier.
It reported a total revenue of $368.1 million in the quarter, beating analysts’ forecast of $299.7 million in a Refinitiv poll.
The group, which last month peer Frontline’s right to end a merger agreement between the companies, said it was seeking “constructive discussion” with all shareholders after Compagnie Maritime Belge, which owns 25% of Euronav’s voting shares and had sought to block the merger, in January called for a general meeting.
Source: Reuters
