Combination carriers yet again a factor in the tanker supply balance?

The world fleet of combination carriers, OBOs and ore-oilers, has been reduced year-by-year since the late 1970s. The fleet peaked at 421 ships totalling 48 million dwt in 1977. 10 years ago the fleet stood at 266 ships totalling 30.2 million dwt, whereas today the fleet consists of 117 ships of 11.7 million dwt. Only 19 combination carriers have been delivered during the last 10 years. Tthe number of combination carriers trading in oil versus those trading in drybulk is a factor in tanker supply.

Today the tanker fleet is tightly balanced, as reflected in the freight markets,and modern with few recycling candidates. The extremely strong dry bulk market has absorbed over 50% of combination carrier capacity. The effect has been felt on the tanker market, even though many older combination carriers may still only trade in the drybulk markets..

As there are only 5 existing combination carriers above 200,000 dwt and 7 below 50,000 dwt, the impact on tanker supply is in the panamax, aframax and suezmax sectors.

Assuming that the 9 combination carriers (50,000 dwt+) built 1980 and earlier may not trade in oil, excluding those on long-term dry charters and further assuming that the maximum percentage of combined carriers in oil is 85% (as seen in October 2002), the potential of additional combination carriers switching back to the oil trade is 3 for the VLCC market, 7 for the suezmax market, 31 for the aframax market and 6 for the panamax market. Thus while the oil trading potential of the combination fleet is no longer large, the greatest additional supply potential to the tanker market from combination carriers is for the aframax sector.