(Reuters) -Euronav expects a rise global sea trade this year driven by the rerouting of Red Sea shipping though a change in the U.S. presidency and a slowdown in China's economy are risk factors, the Belgian oil tanker company said on Thursday.
Seaborne trade is on track to increase by 5.1% this year, with the Red Sea re-routing contributing approximately 3.0% to tonne-mile trade growth, the company said in a press release.
Currently experiencing some of its highest returns in decades, the shipping industry expects this trend to continue, if the status quo holds, the group said.
Many container ships are currently taking a longer route around the Horn of Africa due to attacks by Yemen's Houthi militants in the Red Sea region, in what they say is solidarity for Palestinians in Gaza.
Euronav (NYSE:CMBT) noted that a change in the U.S. presidency in November's elections could have an impact on global geopolitics, with ocean shipping being a key area of focus.
Donald Trump is expected to take a more aggressive stance on China if he returns to office and a potential increase in trade tariffs could negatively affect global trade, and by extension, shipping.
Euronav also pointed out to uncertainty for global oil demand in the third quarter, partly due to China's struggling economy. The country's low consumer spending and high unemployment could lower its energy consumption, impacting global oil demand, Euronav said.
Although the U.S. summer driving season might support oil prices via higher gasoline consumption, geopolitical issues between Ukraine and Russia and in the Red Sea, along with China's economic problems, add unpredictability that might impact Suezmax and VLCC rates, it added.
Danish shipping company Maersk, seen as a bellwether of global trade, said on Wednesday it anticipates a slowdown in global container shipping growth following a robust first half of 2024, marked by customers stocking up to avoid disruptions.