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Wednesday, July 18, 2018

VLCC pooling

Four large VLCC owners, AP Møller, Euronav, Frontline and OSG with 7 to 11 VLCCs each in the spot market plus two small VLCC owners Osprey and Oldendorff, have decided to pool their VLCCs to provide improved service to the charterers and thus become more attractive in the market.

The pool will start with 39 VLCCs, but these owners have jointly 10 VLCCs on order plus 11 chartered out on long term contracts that may join the pool later.

Today there are some 440 VLCCs built 1972-99. Of these some 130 are on long term contracts, of which half are Japanese VLCCs to Japanese charterers. These are mainly newer VLCCs. If we deduct a handful of ships used for storage we arrive at some 260 in the spot market. Most of the 150 plus VLCCs built in the 1970s are in the spot market. Still the new VLCC pool will not obtain a dominating market share, even after the owners get their 10 newbuildings delivered. With a large pool of ships, owners will obtain better market overview and be less likely to panic due to false rumours.

This story and other market information will be available in the January 2000 INTERTANKO Market Report and also at http://www.intertanko.com. The January Market Report will also feature an forecast of U.S. oil demand until 2020. For further information please mailto:erik.ranheim@intertanko.com