HomeNewsCrude oil tanker market grapples with aging fleet, shipyards focus on large container and LNG ships

Crude oil tanker market grapples with aging fleet, shipyards focus on large container and LNG ships

6/9/2024

ATHENS (Reuters)—The crude oil tanker market is grappling with an aging fleet of vessels which need to be replaced, posing a challenge as shipyards are focused on building other types of ships, a top executive with commodity trader Trafigura said on Tuesday.

The crude tanker market, including VLCC supertankers, has remained strong in recent months partly due to longer voyages made by some vessels sailing via southern Africa amid Red Sea attacks by the Houthis, which has tightened availability.

In addition, up to 850 tankers are estimated to have left conventional trading to transport sanctioned oil including from Russia, Iran and Venezuela as part of the so-called shadow fleet.

"The market is grappling with an aging (tanker) fleet that will need to be replaced," Andrea Olivi, head of wet freight for Trafigura, told Reuters. "The big shipyards are currently focused on building large container and LNG (liquefied natural gas) ships rather than VLCC vessels," he said on the sidelines of the Posidonia shipping week in Athens.

An industry source said Trafigura had placed an order for five VLCC newbuild tankers from China's New Hantong Shipyard—their first newbuild orders for VLCCs.

The first two new tankers are scheduled for delivery in 2026 and the remaining vessels in 2027, which will all be dual-fuel ammonia ready, the source added.

It normally takes three years on average for vessels to be delivered from yards with the focus in recent years being on building container ships and LNG tankers due to sector booms.

Lars Barstad, chief executive of leading tanker operator Frontline, told an earnings call last week the market needed to order some 1,100 crude tankers in the coming years, including 400 VLCCs.

"Our confidence in this segment of the market is growing, driven by the need to replace an aging fleet with new vessels," Trafigura's Olivi said, referring to crude tankers.

Trafigura is responsible for more than 5,000 voyages a year and has an average of 400 vessels in their fleet at any given time, which includes tankers and dry cargo, Olivi added.

(Reporting by Jonathan Saul; editing by David Evans)

Related News

Comments

{{ error }}
{{ comment.comment.Name }} • {{ comment.timeAgo }}
{{ comment.comment.Text }}