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Thursday, December 14, 2017

Oil market still quite hot

Despite the relatively strong fall in freight rates, there appears to be no lack of activity in the tanker market. U.S. crude oil imports are high and staying well above 10 mbd and Chinese crude oil imports have bounced back to a record 2.99 mbd in April after a slower start at the beginning of the year. There is a lack of up-to-date figures, but those that we have confirm that the oil market is still quite hot. According to the Geneva-based broker Marinav, VLCC fixtures from the Middle East have on average been about the same as last year for the first half of this year, showing a monthly average of about 104 fixtures. There were 111 for May this year and 96 so far for June. 

According to our information, some 17m dwt of tankers will have been delivered during the first half of 2005 (including 17 VLCCs) compared to just over 3m dwt sold for decommissioning. If this pace of sales for decommissioning continues, the total for the whole year may end up not much higher than 7-8m dwt for the whole year. 

Our records actually show 6m dwt of tankers left to be phased out this year. However these are mainly small tankers, and experience over the last couple of years has shown that many small tankers, that we have identified as phase-out candidates, continue to trade - either in trades other than petroleum, or as upgraded vessels. Some may trade in countries not signatory to MARPOL. 

The fleet will continue to increase over the next 3-4 years and relatively strong demand growth is needed to maintain the market balance. 

For the large tankers the numbers of deliveries/phase-out candidates are:

 

2005

2006

2007

2008

 

Deliveries

Out

Deliveries

Out

Deliveries

Out

Deliveries

Out

Afra

54

24

55

5

53

27

20

6

Suezm

27

 

23

4

27

3

5

3

VLCC

31

2

18

1

35

4

19

1

Contact: Erik Ranheim