At the end of April this year, 3,133 crude oil and product tankers above 10,000 deadweight tons (dwt) were in operation. This amounts to more than 348.8 million dwt.

The orderbook at the end of April contained 1,011 new vessels. In terms of dwt, new contracts come close to 134 million, or approximately 37% of the existing fleet.
Historically, the average fleet increase from 1997 to 2004 was 1.3%, while in the following three years the average growth increased to 6.3%.
Is there any rationale behind this vast increase in the fleet, or are the new orders placed on a pure speculative basis? Will the market face surplus tonnage capacity in the next 3–5 years?
If we look at the fleet of single hull vessels trading and the enforcement of the MARPOL phase-out timetable, the answer to the above may become clearer. Today, according to Clarkson Research Services, there are approximately 87 million dwt of single hull vessels in operation and all of 57 million dwt of these will go in 2010. In other words, even if half of the single hull tonnage converts ahead of schedule, 2010 will be a record year for tanker removals.

Based on the conversion projects currently known, Clarkson states that the tanker fleet will increase by 3.4% in 2008. In 2009, the increase is estimated to be 10.1% while in 2010 we may expect an increase of 2.7%. It should be emphasized that this is not an exact science; there are several variables involved, such as the number of vessels to be converted into other ship types and the flag states’ discretionary exemption of single hull tankers already in operation. The latter is subject to a satisfactory CAS (Conditional Assessment Scheme) and the agreement of each individual administration.
In the wake of the Hebei Spirit accident in the waters outside South Korea in December last year, several flag states have announced their intention to ban single hull tankers from 2010. And it is worth bearing in mind that even if a vessel has been exempted by the flag state, the port states nevertheless have the right to deny entry to their ports!
The tanker market still contains challenges and opportunities. In this edition of Tanker Update we profile some successful tanker owners and also write about other topics, such as the training of seafarers, and provide a brief update on the latest news from the recent MEPC meeting in London, which we hope you will enjoy.
Happy reading!