Sponsored By

Are we facing a shortage of modern VLCCs?Are we facing a shortage of modern VLCCs?

A VLCC newbuilding orderbook that sits at just 1.5% of the current fleet and the fact any new vessel contracts inked now won’t be delivered until second half of 2026, was flagged up by Frontline during its half year results.

Marcus Hand, Editor

August 25, 2023

2 Min Read
AET VLCC sailing
Photo: AET

“What is worrying is the lack of orderbooks for VLCCs and Suezmax. We have the highest percentage of kind of the population above 20 years we've ever seen,” Lars Barstad, CEO of Frontline said in an earnings call.

Some 12.3% of the VLCC fleet, or 108 ships, is over the age of 20 years, while for Suezmaxes 14%, or 85 vessels are over the age of 20 years. While the Suezmax fleet has a larger proportion over the age 20 years it has a relatively larger orderbook equating to 4.5% of the current fleet.

Against the aging fleet and small orderbook Barstad noted that particularly if you ordered a VLCC today delivery slots were not available until the second half of 2026.

“That's three years from now, and it doesn't really add up to the overall expectations of oil demand remaining fairly firm for the next 3 to 4 years,” he said.

While shipowners have been reluctant to order large tankers few shipyards were seen as interested in building them even if there was demand.

“The challenge we have actually in this market, if you look further into the shipyard industry is that one thing is that owners are not really interested in ordering them, but yards are not really interested in taking the orders either,” Barstad explained. “As long as there are higher margin kind of ships to build, they will prefer that.”

Related:Beihai Shipbuilding bags first VLCC order from Euronav

Of around 150 to 200 yards globally capable of building large merchant vessels, around 100 were building bulkers, more 80 of the yards were building containerships, yet Frontline believes just 13 currently have tankers on their orderbooks.

Barstad said there was a structural issue as long as the Korean yards remained absent from building VLCCs. The Korean yards have filled up their orderbooks with ultra-large containerships and LNG carrier contracts.

About the Author

Marcus Hand

Editor

Marcus Hand is the editor of Seatrade Maritime News and a dedicated maritime journalist with over two decades of experience covering the shipping industry in Asia.

Marcus is also an experienced industry commentator and has chaired many conferences and round tables. Before joining Seatrade at the beginning of 2010, Marcus worked for the shipping industry journal Lloyd's List for a decade and before that the Singapore Business Times covering shipping and aviation.

In November 2022, Marcus was announced as a member of the Board of Advisors to the Singapore Journal of Maritime Talent and Technology (SJMTT) to help bring together thought leadership around the key areas of talent and technology.

Marcus is the founder of the Seatrade Maritime Podcast that delivers commentary, opinions and conversations on shipping's most important topics.

Conferences & Webinars

Marcus Hand regularly moderates at international maritime events. Below you’ll find a list of selected past conferences and webinars.

Get the latest maritime news, analysis and more delivered to your inbox
Join 12,000+ members of the maritime community

You May Also Like