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Saudi Arabia Freight Transport Report Q3 2008Published by: Business Monitor International Published: Aug. 18, 2008 - 51 Pages Table of Contents
AbstractVLCC (Very Large Crude Carrier) tanker rates rose sharply from May. According to shipping sources Saudi Arabia’s state-owned Vela International Marine had in that month booked a total of six 280,000 metric tonne tankers on the sport market to carry crude from the Middle East Gulf to the US Gulf in June.Although the bookings were made in two blocks of three with less than a week between them, the first lot were fixed at a price of World Scale 115, and the second at a significantly higher World Scale 140 (World Scale is the index used to calculate freight rates). By the end of the first week of May, daily VLCC rates from the Middle East Gulf to the US Gulf had reached US$86,552, an increase of 2.3% on the preceding week. Even though oil prices are set to ease over the next couple of years, BMI believes that Saudi Arabia’s status as OPEC’s swing producer, together with capacity increases, positions shipping for continued growth. In our latest Saudi Freight Transport Report, BMI concludes that the country’s seafreight tonnage is likely to grow by an annual average of 6.3% over the next five years. Various factors underpin our prediction. We now think that Saudi GDP growth in 2008-2012 will reach an annual average of 3.2% (lower than the 4.7% achieved over the preceding five years). Oil and gas exports will be the drivers of foreign trade. Although the pace of trade growth will ease, tanker exports will remain dynamic. Big infrastructure projects will also help expand maritime transport capacity and boost demand for cargo. By transport mode, we expect the fastest growing area to be sea cargo, followed by rail at an annual average of 4.4%, airfreight at 4.2%, road haulage at 3.4%, and pipeline throughput at 2.3%. The slower growth of oil and gas pipeline throughput will reflect the cooling of the current price boom towards the end of the forecast period. Saudi Arabia scores in a moderate range in terms of its growth forecast for freight transport across all modes through to 2012, with an annual average of 3.5%. However, with its petrodollar revenues, the country has shown recent commitment to reform and improve its transport sector and the current policy agenda (including greater private sector involvement) will bring results further forward. Saudi Arabia’s overall freight rating at 53.9 out of 100 is a little below the average for the Middle East and Africa (MEA) region. It scores well in terms of its economic outlook because of its abundant natural resources, principally oil and gas. However, it does less well in terms of its freighttransport growth projections over the 2008-2012 period and its current regulatory environment. For the 2008-2012 forecast period, we expect the transport and communications sector to continue outpacing the economy as a whole in GDP growth terms. It will achieve average annual growth of 3.6%, versus 3.2% for overall GDP. The total value of transport and communications GDP will rise to US$23.9bn in nominal terms by 2012, representing 5.6% of Saudi Arabia’s GDP. Get Full Details About This Report >> |
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