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Saturday, September 22, 2018

The VLCC fleet and market

Johan G. Olsen's latest VLCC fleet list shows that out of a total of 472 existing VLCCs (including 2 O/Os) oil majors or state-owned companies own 152. In addition, they control 115 tankers on period employment to 2007 and beyond. This means that independent owners own 68% of the VLCC fleet, but that only 205 VLCCs or 43% are trading independently of oil company control/cargo or used for storage.  

Of the total of 96 VLCCs on order for delivery until 2009, independent owners have contracted 59 (62%) while oil majors or state-companies have contracted 37. 14 of the independently-ordered VLCCs are committed on period employment.  

The traditional oil majors (BPAmoco, ChevronTexaco, ExxonMobil, Shell) and Tokyo Tankers have a combined owned fleet of 27 VLCCs, plus 37 on period contract until 2007 or later (including 24 period contracted to Tokyo Tankers), giving them control of only 14% of the VLCC fleet. 

VELA has the biggest single oil company fleet, owning 19 VLCCs, including 15 single hulled (SH) built 1993 and later. It has 4 on contract from the National Shipping Company of Saudi Arabia, 7 on contract from Gulf Management Services (+7 VLCCs for delivery 2006-2008) and one from NS Lemos. This gives VELA control of 31 VLCCs in total.  

The National Iranian Tanker Company (NITC) owns 15 VLCCs, all double hulled (DH), plus they have an orderbook of 13 VLCCs. The Kuwait Oil Tanker Company (KOTC) has 8 VLCCs (including 6 SH VLCCs) plus two on order. Altogether Middle East companies own 58 VLCCs, control 20 on period contracts and have 24 on order. 

The biggest independent VLCC owner is Mitsui OSK with 34 VLCCs, 8 of which are SH, plus 8 on order. NYK has 28 VLCCs, 7 of which are SH, plus 8 on order. Altogether Japanese owners have a fleet of 98 VLCCs (21% of the fleet) plus an orderbook of 28 VLCCs. 

Frontline has 28 VLCCs, 9 of which are SH [plus 1 with double sides ] and 4 are on bare boat contract to Shell. Frontline has sold a number of VLCCs to the German KG Dr. Peters and has 6 VLCCs on 10/13 year period contracts from Dr. Peters. Frontline is therefore the independent company that controls the largest number of VLCCs in the world. The other two major independent VLCC owners, World Wide and Angelicoussis, have respectively 21 VLCCs, (9 SH) plus 2 on order and 18 VLCCs (5 SH) and 2 on order.  

The distribution of the largest VLCC owners is: 6 owners with 18-34 VLCCs, 8 with 10-15 VLCCs, and 16 with 5-9 VLCCs. This means that VLCC owners with 5 or more tankers own 356 VLCCs or 75% of the fleet. 

There are only 52 trading VLCCs left that were built before 1990 (26 built 1988/89), 3 of which were built in the 1970s (INTERTANKO figures). The peak building years were 1993 and 2000, when 39 and 41 VLCCs respectively were delivered. 

The average size of VLCCs is increasing, as in other segments. The average size of those built before the 1980s was 263,057 dwt, whereas the average size of those built in the 1990s was 286,333 dwt, and the average size of those built later was 306,938 dwt. (including orders). All the VLCCs on order are above 298,000 dwt. 

According to our records, there are 170 SH VLCCs left (including 9 with DB/DS), meaning there are 302 DH VLCCs. Only 36% are therefore SH. The DH share over the next few years will increase due to delivery of new DH VLCCs rather than removal of SH VLCCs. When taking current orders and compulsory phase-out into account, by end 2009 some 73% will be DH.

In the year 2010 there will still be some 153 SH VLCCs (including DB/DS) and all are less than 25 years old. We do not know how many of these will find a market to trade until the age of 25 years old, as relatively few countries have declared their position on whether to accept SH tankers until the age of 25 years old after 2010. We know that Europe will not accept them, but Japan and Singapore have announced that they will do so. 

The spot market for VLCCs has been strong, despite many newbuilding deliveries and a reduced level of activity so far this year compared to 2004.

(December figures are naturally preliminary and the November figures may be revised.) 

West Africa fixtures 2005































  VLCC fixtures from the Persian Gulf have been at a continuously high level since May. The relatively low level in February/March means that the average monthly level for the first 11 months of the year (104) is still slightly below the level for the same period in 2004 (106). 

According to Clarksons, it is in particular the fixtures from the Persian Gulf and westwards that have been increasing strongly, though the average for the year is still considerably below the 2004 level.

The fixtures for November shown above are actually only for the last four weeks until 11 November. 

(If  the graphs are not visible they can be viewed on the INTERTANKO web site at:

Contact: Erik Ranheim