Middle East shipping industry projected to grow 35 per cent

The Middle East shipping industry is projected to grow by 30 to 35 per cent this year, increasing its share of the global sea freight market, according to senior analysts and industry experts.

The high demand for oil worldwide, the increasing demand for commodities within the Middle East and the positioning of the region as a major logistics hub are helping the regional shipping industry to grow further. "Strong growth in trading activities backed by increasing demand for commodities is keeping the Middle East shipping industry afloat. But oil and gas shipments remain the key factors for strong growth in the region," said Abdullah Al Shuraim, Chairman for Gulf Navigation Holding. Increased demand for energy from the expansionary BRIC economies (Brazil, Russia, India and China) is expected to drive the demand for crude oil upwards, despite deceleration in the growth of western economies. Current growth trends in global shipping are being attributed to increased shipment of goods from China, but are being also boosted by massive demand for materials and supplies needed to sustain the growth in the Middle and the Far East. The International Energy Agency (IEA) has estimated a 1.5 per cent year-on-year increase in world energy consumption in 2007 forecasting an increase of 2.4 per cent in 2008. Accordingly, the worldwide oil consumption is expected to increase from 85.9 million barrels per day in 2007 to 87.9m bbls per day in 2008. The world demand is set to grow to 118m bbls per day by 2030 as a result of population increase and rise in development activities. The growth in demand will continue to require transportation of oil and redistribution of shipping movements to cater to the rising consumption. To increase profit margin, European shipping firms are taking tentative steps towards consolidation. Maersk Line, the industry leader, plans to begin sharing vessels with competitors on some transpacific routes, as part of a broad cost-cutting programme. Singapore's Neptune Orient Lines has is eyeing a tie-up with TUI of Germany.
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