Tanker ordering is at historical lows and logistical problems generated by the Covid-19 pandemic could push some deliveries scheduled for 2020 into 2021.
Tanker ordering activity has slipped approximately 40% below the 20-year average, according to Galbriaths’ head of the research department Annika Bartels, speaking at the Tanker Shipping & Trade virtual conference in November 2020.
“The final number of 2020 deliveries will certainly be lower than what we are seeing now, and some vessels will slip over into 2021,” she said.
The decline in contracting occurred long before the outbreak of the Covid-19 pandemic and the causes are more fundamental. “This (lack of ordering) is mostly due to tighter financial availability, lower capacity of shipyards, and of course, the current low freight rate environment,” she said. “But one of the biggest concerns owners are having are the evermore stringent environmental regulations.”
Choose the ‘wrong’ fuel could see a multi-million-dollar investment in a crude oil tanker become a stranded asset.
The other uncomfortable statistic is that the tanker orderbook compared to the fleet is at its lowest level since 2015. The situation in the yards could actually be worse than shown on paper. Ms Bartels noted that approximately two-thirds of the tankers scheduled for delivery in 2020 were not launched, due to Covid-19 and the difficulty in securing inspections.
The result is a decline in the ratio of contracts-to-new fleet to below 10% for the three largest sectors, a situation not seen since the 1990s.
Tanker fleet removals were also low in 2020, especially among the larger sizes. Currently, around 7% of the crude oil tanker fleet is 20 years old or older. Looking ahead to 2023, the figures jump significantly, especially among the Aframax tanker fleet.
Riviera’s free technical and operational webinars will continue in 2021. Sign up to attend on our events page.