Tanker ordering tipped to hit historic lows through to 2024

After a weighty amount of tanker deliveries through to the end of 2021 a new report out is suggesting tanker orders are set to experience historic low numbers in the coming few years.

Tanker brokers Gibson noted in its most recent weekly report that tanker supply is expected to increase in the short term, with more than 300 new vessels over 25,000 dwt scheduled for delivery between now and December 2021. However, tanker analysts at rival broking house, Braemar ACM, suggest further orders are likely to be muted.

“We would argue that ordering will be historically low for tankers over the next few years. We are expecting very little to be added to the 2021 delivery schedule, and only another 9m dwt to existing 2022 deliveries,” Braemar ACM suggested in a new report. This would leave total 2022 deliveries 10% down on 2021 in dwt terms. 2023 deliveries are unlikely to see much change on 2022, Braemar ACM predicted, suggesting they would fall by another 6% year-on-year before finally picking up the following year.

Tanker rates enjoyed an extraordinary April with daily earnings on major routes for VLCCs at $181,000, suezmaxes at $78,000 and aframaxes at $59,000. However, towards the end of last week rates have come off the boil with a number of analysts suggesting the peak of the cycle has now passed.

“VLCC spot rates collapsed this week, as we expected on the back of OPEC+ cuts from May and dwindling Atlantic exports. As we have previously highlighted, floating storage is seemingly the only play left in owners’ playbook, and we expect it will too unravel in the coming months,” Cleaves Securities noted in a weekly report published yesterday.

Cleaves estimates that 11% of the oil tanker fleet is currently tied up in floating storage, a significant rise from around 4% at the start of the year. Cleaves predicts floating storage volumes will peak at around 19% of the total oil tanker fleet in July.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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