Crude oil tanker market grappling with ageing fleet, says Trafigura

Frontline

04/06/2024 15:44

By Jonathan Saul
       ATHENS, June 4 (Reuters) - The crude oil tanker market
is grappling with an ageing fleet of vessels which need to be
replaced, posing a challenge as shipyards are focused on
building other types of ships, a top executive with commodity
trader Trafigura said on Tuesday.
    The crude tanker market, including VLCC supertankers, has
remained strong in recent months partly due to longer voyages
made by some vessels sailing via southern Africa amid Red Sea
attacks by the Houthis, which has tightened availability. 
    In addition, up to 850 tankers are estimated to have left
conventional trading to transport sanctioned oil including from
Russia, Iran and Venezuela as part of the so-called shadow
fleet.
    "The market is grappling with an ageing (tanker) fleet that
will need to be replaced," Andrea Olivi, head of wet freight for
Trafigura, told Reuters.  
    "The big shipyards are currently focused on building large
container and LNG (liquefied natural gas) ships rather than VLCC
vessels," he said on the sidelines of the Posidonia shipping
week in Athens. 
    An industry source said Trafigura had placed an order for
five VLCC newbuild tankers from China's New Hantong Shipyard -
their first newbuild orders for VLCCs.  
    The first two new tankers are scheduled for delivery in 2026
and the remaining vessels in 2027, which will all be dual-fuel
ammonia ready, the source added.  
    It normally takes three years on average for vessels to be
delivered from yards with the focus in recent years being on
building container ships and LNG tankers due to sector booms. 
    Lars Barstad, chief executive of leading tanker operator
Frontline, told an earnings call last week the market needed to
order some 1,100 crude tankers in the coming years, including
400 VLCCs.   
    "Our confidence in this segment of the market is growing,
driven by the need to replace an aging fleet with new vessels,"
Trafigura's Olivi said, referring to crude tankers.
    Trafigura is responsible for more than 5,000 voyages a year
and has an average of 400 vessels in their fleet at any given
time, which includes tankers and dry cargo, Olivi added.

 (Reporting by Jonathan Saul; editing by David Evans)
 ((jonathan.saul@thomsonreuters.com; + 44 207 542 4357 ; Reuters
Messaging: jonathan.saul.thomsonreuters.com@reuters.net))