Stena Bulk Blog

By Erik Hånell, President & CEO of Stena Bulk
April 2022

I have written many times over the last year about how Stena Bulk has done all it can to weather complex and challenging market conditions. I have explored how we believe our focus on excellence – and not least in sustainability – is setting us up well for the future.

I also shared Stena Bulk’s belief that the tanker market would sail into smoother waters during the first part of 2022 and, although early in recovery, we believe that there are reasons for real optimism as we head into the summer.

Firstly, we must acknowledge that there is still much uncertainty stemming from the conflict between Ukraine and Russia. We are sharing all our thoughts with those who have been impacted or displaced by this crisis, including our maritime industry colleagues and seafarers that are continuing to operate in the Black Sea.

Currently, we have limited our exposure to Russia by deciding we are not calling Russian ports. It goes without saying we are following all other regulations and sanctions, and will prioritise the safety of our people operating in and around high-risk areas as the situation continues to unfold. We stand with all those suffering as result of this terrible conflict and will do all we can to ensure we operate compliantly and safely as the situation evolves.

At the same time, we must also recognise that the conflict has implications on our day-to-day operations because of the very thing that shipping enables: an interconnected global economy. The same volatility in global energy prices that we are all feeling in our home heating bills is impacting oil products and therefore freight rates.

The overall trend is of slow and steady recovery. Oil buyers are replenishing their inventories, refinery margins remain high and I would tend to agree with Ole-Rikard Hammer, Senior Analyst Oil and Tankers at Arctic Securities, who recently said that “cyclical freight market recovery has begun and all segments are now seeing rates approaching pre-pandemic normal levels.”

Of course, we must not rest on our laurels. The last few years have proven to all of us how quickly a black swan event can disrupt best laid plans and strategies. For example, in the last couple of days, the International Energy Agency downgraded its 2022 global oil demand forecast for a second consecutive month, mainly as a result of China’s Covid-19 lockdowns and the tightening impact of sanctions on Russia.

This is offset by the obvious macroeconomics of Europe now requiring oil from further afield, which will increase tonne-miles. Meanwhile, the prevailing consensus is that new environmental regulations coming into force like CII and EEXI could result in more recycling and speed reductions for the existing global fleet, which will alter the supply/demand balance further.

That notwithstanding, Stena Bulk is always guided by the market, and the mixed picture from the IEA and their bearish predictions vindicate a steady approach to this recovery. We will keep an eye on the market and be even-handed in our optimism – even if there are now genuine reasons for that optimism after a difficult few years.

Most importantly, the whole team at Stena Bulk feels that we are well positioned to make the most of this more positive market trajectory - and that we will continue to deliver for our customers as we have managed to keep doing over the last couple of years – thanks to prioritising our fleet and focusing on excellence across our operations.

Gothenburg, April 2022
Erik Hånell, President & CEO at Stena Bulk