OREANDA-NEWS. March 27, 2017. Strong shipments of Atlantic basin crude to Asia, including exports from the US, have mitigated the impact of a rapidly growing crude tanker fleet on freight rates, said crude tanker owners at the Capital Link International Shipping Forum in New York City on 20 March.

"[Tanker] demand remains surprisingly resilient. We have been shipping a lot from the US Gulf coast to China", said Paddy Rodgers, the CEO of Euronav, one of the largest dirty tanker operators.

North American crude producers have successfully bit into Opec's market share in Asia, as the organization's adherence to production cuts announced in November of last year has made US and Canadian crude more attractive.

When Opec pulled back its production, it spurred demand from the Atlantic basin, said Robert Burke, CEO of Ridgebury Tankers. "We are seeing a lot more oil out of the US", said Burke.

US crude exports have amounted to 750,000 b/d this year through 17 March according to the US Energy Information Administration (EIA). About 40pc of the total has landed in Asia so far this year, estimated MJLF tanker analyst Court Smith, far exceeding the proportion last year.

Only 11pc of the 520,000 b/d that the US exported in 2016 went to Asian countries, consisting of China, South Korea, Singapore, Japan, and Taiwan, according to data from the US Energy Information Administration (EIA).

US crude to Asia travels primarily on Suezmax and VLCC tonnage. Draft restrictions at US Gulf coast ports preclude these larger tankers from taking full cargoes directly from port terminals, so the ships must be filled - or topped off - via ship-to-ship transfers in the Gulf of Mexico. "We are seeing a lot of reverse lighterings", said Lois Zabrocky, the CEO of International Seaways.

While longer voyages from the Atlantic basin to Asia are displacing some of the shorter ones originating in the Middle East, adding tonne-miles to the tanker market, the flood of new dirty tanker tonnage onto the market has worried shipowners and already pushed freight costs down.

"The orderbook is certainly problematic", said Burke. Strong tanker rates from late 2014 and through 2015 triggered a wave of tanker orders at shipyards. The new deliveries have already begun to weigh on rates, helping to drop the year-to-date average Caribbean-Singapore VLCC rate by 26pc year-on-year to $4.6mn lumpsum. It takes a shipyard roughly two years to construct a supertanker.