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Sunday, September 23, 2018

Strong growth in the Suezmax fleet


Johan G. Olsen has issued its suezmax fleet list, which details the employment of the ships and the charterer. These tankers do not really live up to their name as only on average 11 per month passed through the Suez Canal in 2004, which was actually less than the number of VLCCs. However, passages through the Suez Canal increased from a monthly average of 5.6 in 2002, to 8.8 in 2003, 11 in 2004, 15.8 in 2005 and 16.3 in the first half of 2006.


The publication lists 368 existing ships, plus 106 newbuildings on order for delivery until 2008 and later. Oil majors or state-owned companies own 109 existing ships, plus 11 on order. In addition, they control four tankers which are on charter until 2008 and beyond. This means that independent owners own 70% of the suezmax fleet. Independent owners have 95 suezmaxes on order, five of which are fixed for 2008 and beyond.


The four oil majors, BPAmoco, ChevronTexaco, ExxonMobil and Shell, have a total fleet of 12 suezmaxes, plus seven on period charter until 2007 or later.


The biggest suezmax owners are Frontline and Teekay with 25 suezmaxes each. The Frontline fleet includes 8 OBOs. Teekay’s fleet is split into three fleets: Teekay shipping with 12 suezmaxes, Teekay Norway with eight and Teekay Spain with five. The third biggest suezmax operator is Tanker Pacific  with 16 single hull suezmaxes. Knudsen OAS has 15, the same as the KG company Konig & Cie. 


There are eight owners with 12-25 tankers each, controlling a total of 135 ships - 37% of the fleet. There are 15 owners with 5-9 tankers each, controlling a total of 97 ships - 26% of the fleet.


So the 23 owners with five tankers or more have almost two thirds of the fleet. The remaining 136 suezmaxes, owned by entities with less than five suezmaxes, are split between some 79 owners.


The average age of the suezmax fleet is 8.2 years. 2% were built in the 1970s, 9% in the 1980s, 38% in the 1990s, and 51% in this decade. Some 78% of the suezmax fleet are double hulled, 6% have double bottom or sides, which means that only 16% are single hulled. 

Looking at the phase-out of single-hulled suezmaxes, 4-7 trading ships have already been barred from the U.S. (except dedicated lightering areas and LOOP) according to OPA 90. According to MARPOL 13G, there is only one left for phase-out this year, zero in 2007, two in 2008 and three in 2009. There are a total of 67 single-hulled suezmaxes of 9.6 m dwt due for phase-out, compared to an orderbook of some 96 suezmaxes of 15.2 m dwt (Clarkson Shipyard Monitor Nov. 2006).


The phase-out in 2010 will be between 3 and 45 ships, the larger figure if there is no market for suezmaxes to trade until the age of 25 years old if the relevant flag/port states allow - operators of single hull tankers need to obtain a positive response from both flag and port administrations to be allowed to trade their tankers until they are 25 years old after 2010.


When the current orderbook has been delivered, and if phase-out has been strictly according to regulation, the fleet could increase by about 8% in 2007, by just under 5% in 2008 and by more than 11% in 2009.


We have recorded 16 suezmax period contracts of one year and longer so far in 2006 and the typical rate has been some USD 33,000-38,000 per day with an average of USD 36,800 per day. The average period was 2.8 years. Litasco was the most active period charterer taking four suezmaxes for three-year contracts.


Suezmaxes have been doing the best after the last downturn in the market and the average rate so far is better than for the same period in 2005, but lower than in 2003 and 2004.  The positive factor for suezmaxes has been the increasing exports from West Africa and the opening of the Baku-Ceyhan pipeline.  


Contact: Erik Ranheim