Already at the start of the second quarter of 2017 Asia’s crude tanker market finds itself flooded with a flurry of newbuilds that hit the water over the last quarter, according to a report from Ocean Freight Exchange (OFE).

New tonnage delivered hit 15 million dwt in the first quarter and is expected to stand at 8.7 million dwt in the second quarter, OFE cited data from Lloyd’s List Intelligence.

The gradual but steady unwinding of floating storage in global hotspots due to a flattening Brent futures curve is likely to release a constant stream of tonnage into the market, exacerbating the situation of oversupply.

The negative impact of unusually heavy refinery turnarounds in Asia as well as OPEC production cuts seems to have been offset by increased ton-mile demand from a surge in long-haul shipments, which has put a floor under tanker spot rates.

Amidst such bearish factors, a recent spike in long-haul trades from the Americas has provided a much-needed boost to the Asian very large crude carrier (VLCC) market. Around 27 VLCCs are headed to Asia in April, with not all cargoes confirmed.

“We might see some recovery in VLCC rates at the end of Q2 as peak turnaround season comes to an end and a slowdown in newbuild deliveries takes place,” OFE said, adding that lower cargo flows from Iran and Iraq are expected to add downwards pressure to the Suezmax market in the second quarter of the year.