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No large tanker newbuilds ordered in over a yearNo large tanker newbuilds ordered in over a year

No VLCCs or Suezmax tankers have been ordered for more than a year, as owners hold off in the face of sharply higher prices and other uncertainties.

Paul Bartlett, Correspondent

August 22, 2022

1 Min Read
AET VLCC sailing
Photo: AET

According to New York broker, Poten & Partners, the last VLCC contract was placed in June 2021, followed a month later by the last Suezmax order. No new panamax tankers or LR1 tonnage have been ordered since April 2020 and only six Aframax/LR2s and seven MRs have been ordered so far this year, the broker said.

The tanker market is fraught with uncertainty. Not only do owners face prices up by close to 20-30% on first-half 2021 prices, but there is uncertainty on propulsion type and, of course, bigger questions about the future of tanker shipping generally as the world’s decarbonisation drive becomes more urgent.

“There is the general expectation that global oil demand (and its transportation) will likely peak within the nest 10-20 years,” Poten said in its most recent weekly Tanker Opinion.

For a shipowner, that is not a strong incentive to invest in an asset that has a 20-year life. Especially, if (in the case of a VLCC) it is 28% more expensive than last year and you won’t get it delivered for at least another two years.”

That explains why tanker owners are targeting secondhand tonnage. A secondhand tanker is cheaper (in relative terms), Poten said, and can be employed in today’s rising market immediately.

Noting that Greek and Chinese owners have been particularly active as both buyers and sellers, the broker said: “Buyers want to expand or renew their fleet to take advantage of rising rates, while sellers see an opportunity to shed older assets at attractive prices and/or realise some gains on previously acquired tonnage.”   

Related:Al Seer Marine buys VLCC pair for $110m

About the Author

Paul Bartlett

Correspondent

UK-based Paul Bartlett is a maritime journalist and consultant with over four decades of experience in international shipping, including ship leasing, project finance and financial due diligence procedures.

Paul is a former Editor of Seatrade magazine, which later became Seatrade Maritime Review, and has contributed to a range of Seatrade publications over the years including Seatrade’s Green Guide, a publication investigating early developments in maritime sustainability initiatives, and Middle East Workboats and Offshore Marine, focusing on the vibrant market for such vessels across that region.

In 2002, Paul set up PB Marine Consulting Ltd and has worked on a variety of consultancy projects during the last two decades. He has also contributed regular articles on the maritime sector for a range of shipping publications and online services in Europe, Asia, and the US.

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