By the end of 2019, more VLCCs will have been delivered than in any year since 1976, giving the VLCC fleet a growth rate of 8% to date
Thus far in 2019, 65 VLCCs, with a total of 19M dwt, have been delivered while only four ships, totalling 1M dwt, have been demolished.
Four more VLCCs are expected to be delivered in the final month of 2019.
This year’s growth spurt edges past the previous modern record, set in 2011 when 62 VLCCs were delivered. However, both delivery totals still fall some way short of the record 116 VLCCs delivered in 1974.
In October, VLCC freight rates climbed to record-breaking levels of US$307,888 per day.
Tanker Shipping & Trade commentary at the time attributed the rates increase to a confluence of geopolitics and the upcoming IMO 2020 sulphur cap but said the likelihood was high that more rates spikes would happen over coming years.
Rates have since come down from the spike but have remained at levels that are much higher than before the spike. The average VLCC-rate was US$50,000 per day on 13 November 2019.
In anticipation of a strong demand boost from the IMO 2020 sulphur cap, shipowners have pushed up fleet growth, as well. BIMCO’s latest forecast is that the crude oil tanker fleet will grow by around 1.5% in 2020 which is a slowdown from 2019 due to increased demolition activity and lower tonnage delivery.