Tanker top 10: the VLCC tanker sector

The VLCC sector covers tankers carrying crude oil in the size range over 200,000 dwt, of which there are 897 live VLCC tankers in the current fleet with an average age of 10.8 years old. There are only 20 vessels on order, representing just 2.3% of the fleet. There are only two further VLCCs due for delivery in 2023 (joining 22 VLCCs delivered in 2023).

However, there are no VLCCs scheduled for delivery in 2024, which is extraordinary. The orderbook for 2025 is currently in single figures (four vessels) and so far, expected deliveries in 2026 number 11 VLCCs.

The lack of newbuilding orders is going to have a very interesting impact on the number of VLCCs available to charter. Currently, most top-tier charterers have an age limit of 15-years old, which excludes 28% of the VLCC fleet.

VLCCs older than 15-years old continue to find employment in the ghost fleet that serves the illicit sanction-busting trades in crude oil, which is one of the reasons there has been no recorded sale of a VLCC for recycling (scrapping) in 2023. The last reported sale for recycling of a VLCC was in August 2022.

If there is no change in deletions from the fleet, the over-age portion of the VLCC fleet will continue to grow and in five years’ time, the 15-years’ old and older portion of the VLCC fleet will reach 56%; or to put it another way, top-tier charterers will only be able to access 44% of the VLCC fleet.

“The lack of newbuilding orders is going to have a very interesting impact on the number of VLCCs available to charter”

The current beneficial ownership of VLCCs is being distorted by the resolution of the long-running takeover/merger situation of Frontline and Euronav, which has been resolved (in part) by the sale for shares and the impending transfer of 24 VLCCs from Euronav to Frontline. However, these have yet to be delivered and still appear in the Euronav fleet.

However, the addition of the 24 modern Euronav VLCCs to the Frontline fleet means that, assuming no sales out of its recently acquired vessels, in five-years’ time, Frontline will be the largest owner of VLCCs under the age of 15-years old.