MARPOL 13G single-hull tanker phase-out - update

INTERTANKO has reviewed the single-hull phase-out information for the tanker fleet as of end October 2002. The main findings are that tankers continue to be sold for recycling before their MARPOL 13G phase-out deadline.

When deducting the tankers sold for recycling this year, we see that only 3 Aframaxes, no Suezmaxes and 2 VLCCs are left to be phased out in 2003, according to MARPOL 13G. The current order books for Aframaxes, Suezmaxes and VLCCs cover the scheduled single-hull phase-out of the respective segments well into 2009. In the table, the U/VLCC-, Suezmax-, Aframax- and Panamax fleets are used as examples of the scheduled phase-out and replacement demand based on the current orderbook and two different tanker demand growth scenarios. Click here to download the table.

Of the 220 single-hull U/VLCCs, 60 are scheduled for phase-out in the period 2003-2007. Assuming that the new deliveries have a 5% higher efficiency than the replaced tankers, the replacement demand is 57 tankers. The current orderbook stands at 70 U/VLCCs, indicating a surplus of 13 tankers in this period. Should oil demand grow by 1.5% annually the added demand for U/VLCCs would be 33 tankers indicating a remaining newbuilding demand for 20 more U/VLCCs than the current orderbook in the period 2003 to 2007. Should oil demand grow by 3% the remaining newbuilding demand would be 72 U/VLCCs.For the Suezmax fleet there is no remaining newbuilding demand in the low oil demand growth scenario and a newbuilding demand for 2 Suezmaxes in the high growth scenario in the period 2003-2007. For the Aframax fleet the remaining newbuilding demand in the low growth scenario is 26 tankers and in the high growth scenario 40 tankers. For the Panamax fleet the remaining newbuilding demand in the low growth scenario is 5 tankers and in the high growth scenario 14 tankers.

Compared to the US OPA 90 phase-out of single hull tankers, the MARPOL 13G has fewer ships to be phased out in 2003 than OPA but more ships to be phased out in 2004 and about the same level in 2005. OPA 90 will allow ships below 15,000 GT to trade longer than under the MARPOL 13G regulation. As an example, small single-hull tankers (5,000-20,000 dwt) built in 1970-1973 will be phased-out under MARPOL 13G in 2003, whereas single-hull tankers (5,000-15,000 GT) built in 1970-1973 can trade to the US until 2005. More ships will be phased-out under MARPOL 13G in the period 2006-2008 than under OPA as some these ships will not face the single-hull cut off date under OPA until 2010. For the larger single-hull tankers (30,000 GT and above), OPA 90 is more stringent than MARPOL 13G. However, single-hull tankers can call on LOOP and designated lightering zones until 2015.