In its latest weekly report, Gibson said that the IMF believes further energy price increases are likely, predicting that oil prices will increase 60% above 2020 levels. So far, Gibson notes, Brent and West Texas Intermediate are up by 40% and 46% respectively in the year to date.

Tanker owners breathed a collective sigh of relief when OPEC+ members finally agreed to notch up crude production by 400,000 barrels per day (bpd) each month from now until the end of the year. Meanwhile, despite the resurgence of Covid-19 outbreaks in various countries – including China and India – most economies are in recovery mode and far ahead of where they were this time last year. Industrial demand is relatively buoyant.

Strengthening demand and higher oil prices are usually positive for tankers. Yet rates across much of the sector remain stubbornly low. Most VLCCs, amongst others, have been operating in the red for weeks.

Gibson warned that higher oil prices this time raise the risk of “demand destruction” by increasing the attraction of typically higher cost renewables and low carbon fuels at oil’s expense. Whether higher prices are good news or not this time, the shipbroker said, will depend on the extent of price gains and how much extra oil comes to market.

Separately, the shipbroker suggested that if inflation looks set to exceed long-term targets, then central banks will be forced to act, potentially leading to tighter interest rates and a higher cost of capital. If, in these circumstances, the market still won’t support higher charter rates, then the medium-term outlook for tankers is poor.