Euronav, a shipping company based in Belgium, predicts an increase in global sea trade this year due to changes in Red Sea shipping routes. The company mentioned potential risk factors, including the change in the U.S. presidency and a slowdown in China’s economy. 

They expect seaborne trade to increase by 5.1% this year, with the Red Sea shipping changes contributing approximately 3.0% to the trade growth.

The shipping industry is currently experiencing some of its highest returns in decades, and if the current situation continues, this trend is expected to continue. Due to disturbances in the Red Sea region, many container ships are taking a longer route around the Horn of Africa.

Euronav highlighted the potential impact of a change in the U.S. presidency on global geopolitics, specifically in ocean shipping. The company suggested that if Donald Trump returns to office, there could be a more aggressive stance on China, potentially resulting in increased trade tariffs that negatively affect global trade and shipping.

Additionally, Euronav pointed out the uncertainty surrounding global oil demand in the third quarter, partly due to China’s economic challenges. They specifically mentioned that China’s low consumer spending and high unemployment could decrease its energy consumption, impacting global oil demand.

Furthermore, they mentioned that despite the potential support for oil prices through higher gasoline consumption during the U.S. summer driving season, geopolitical issues between Ukraine and Russia, as well as in the Red Sea, along with China’s economic problems, introduce unpredictability that might impact Suezmax and VLCC rates.

Another shipping company, Maersk, anticipates a slowdown in global container shipping growth after a strong first half of 2024, largely due to customers stocking up to avoid disruptions.

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