Liquid fuels production and consumption will be imbalanced during much of 2020 with total production estimated at 102.2 million barrels per day (m bpd) in Q2 compared to estimated consumption of 100.3m bpd, data from US EIA shows. This implies an inventory buildup of 1.9m bpd.

Most of it set to take place in April for as long Saudi Arabia keeps production elevated.

With land-based oil storage potentially approaching full capacity fast, there is a limit on how much additional oil can be imported. Risk-loving oil traders may look to time charter VLCCs for floating storage.

BIMCO believes such actions will extend the time of elevated freight rates that soared recently a result of the recent geopolitical developments marked by OPEC+ negotiations falling apart and Saudi Arabia initiating an oil price war.

However, as the outbreak of the coronavirus continues to drag on economic growth, and particularly dampen demand for oil products, the association expects a gloomy medium-term outlook for the tanker market.