Periodicity of world crude oil maritime transportation: Case analysis of Aframax Tanker market

Abstract

The oil tanker shipping market always presents periodicity following varied laws in different periods. However, most of the studies on the tanker freight rate market are short-term projections, while those on its long-term periodicity characteristics are mostly qualitative ones. In order to study the periodic variation law of the tanker market, this paper uses quantitative methods to figure out the cycle duration and amplitude of different scales of Aframax tanker's freight, and predicts the long-term variation trend of freight rate on that basis. This paper selects the one-year charter freight rate of Aframax tankers (110,000 DWT D/H) to comprehensively analyze the Aframax tanker freight market variation law, and further divides the cycle into three major categories. With the help of wavelet analysis, this paper quantifies the periodic volatility of the Aframax tanker shipping market, and figures out a quarterly cycle of 11.2 months, a short-term cycle of 3.7 years, and a medium-to-long-term cycle of 11.9 years. Based on the cycle characteristics, the paper predicts the market cycle trend to the next medium-to-long-term cycle and further to the year 2030, so as to offer some reference to oil tanker shipping market players for better decision-making.