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Tuesday, December 12, 2017

Half the suezmaxes already built/being built in this decade

Johan G. Olsen has issued its suezmax fleet list, which includes the employment of the ships and the charterer. These tankers do not really live up to their name as only on average 5-10 are passing through the Suez Canal per month, which is actually less than the number of VLCCs. The publication lists 322 existing ships (including 16 OBOs) and 80 newbuildings on order. Oil majors or state-owned companies own 82 existing and 25 orderbook ships and in addition they control 60 tankers which are on charter to 2006 and beyond. This means that independent owners own 75% of the suezmax fleet, but only control 56% of it. The independent owners have 55 suezmaxes on order of which 9 are fixed for 2006 and beyond.

The four oil majors, BPAmoco, ChevronTexaco, ExxonMobil and Shell, have a total fleet of 14 suezmaxes, plus 6 on period charter until 2006 or later. BP has 14 suezmaxes on order, 10 from Samsung and 4 from Tsuneishi.

The biggest suezmax owner is Frontline with 25 suezmaxes, including 8 OBOS. The 2nd biggest suezmax operator is General Maritime with 19 suezmaxes. Sovcomflot has 12 suezmaxes and 12 on order. In addition there are 19 owners with 5-12 tankers each, totalling 135 ships plus 26 newbuildings. The 5 owners with 10 tankers or more have a 25% market share and the 22 owners with 5 tankers or more have a 35% market share. The remaining 131 suezmaxes are split between some 68 owners.

The average age of the suezmax fleet is 9.2 years; 4% were built in the 1970s, 11% in the 1980s, 36% in the 1990s, and 49% in this decade including the orderbook. 71% of the suezmax fleet is double hulled, 8% have double bottom or sides which means that only 21% is single hulled. When the suezmax fleet built 1982 and earlier is removed at the end of 2005, the double hull share will be 80%.

Looking at the phase-out of suezmaxes, 14 of the trading ships have already been barred from the US (except dedicated lightering areas and LOOP) according to OPA 90. The EU denied access to 14 as from 21 October 2003. Only 4 are due for phase-out this year and 14 next year according to MARPOL, with another 10 suezmaxes due for phase-out 2006-2009. The 28 suezmaxes totalling 4 m dwt due for phase-out before 2010 should be seen against the orderbook of some 80 ships of 12 m dwt.

We have recorded 14 suezmax period contracts of 6 months and longer since March 2003 and the typical rate has been some USD 22,000-24,000 per day. The average period was two years. Petrobras has been the most active period charterer taking four suezmaxes for 2-3 year contracts over the last year.

The positive factors for suezmaxes:

  • Increasing Russian oil exports from the Black Sea. FSU oil production increased by almost one million barrels per day in 2003 to 10.3 mbd and IEA project a further 0.7 mbd in 2004 to 11 mbd.
  • Increasing US crude oil imports. According to DOE/EIA, the US crude oil imports 2003 of 9.5 mbd were some 7% higher than in 2002 and the highest ever for this period - the previous record being 9.2 mbd in 2001.
  • Increasing Chinese crude oil imports. China increased consumption by 0.54 mbd in 2003 and production is projected to continue to increase by 0.58 mbd in 2004. Its domestic production is virtually flat.
  • Relatively low US commercial crude oil stocks and the building up of strategic stocks

Negative aspects for suezmaxes are:

  • There are only 28 suezmaxes due for regulatory phase-out before 2010 and the orderbook is some 80 ships.
  • Limited US refinery capacity may mean that the increasing US oil imports to a greater extent will be met by products imports.

Contact: Erik Ranheim