Business, Freight News, Sea

Tanker Deliveries Plunge 74%, BIMCO, Says

[ January 31, 2025   //   Gary G Burrows ]

Crude oil tanker deliveries plunged 74 percent to a 36-year low in 2024, said Niels Rasmussen, chief shipping analyst at BIMCO.
Only 17 new tankers with 2.5 million deadweight tons of capacity joined the fleet in 2024. Recycling of crude tankers increased only 0.2 percent to 1.7 million dwt in 2024, the slowest growth in 23 years.
Capacities for the Aframax and Suezmax segments grew 0.5 percent and 1.1 percent, respectively. However, capacities of the very-large crude carrier, or VLCC, segment fell 0.2 percent as two ships were recycled, and no new ships were delivered.
“Deliveries and fleet growth ended at multi-year lows as contracting in 2022 fell to only 3.2 million dwt, 83 percent lower than the last 10 years’ average. This is despite Russian sanctions leading to longer voyages which contributed to a substantial rise in earnings during 2022,” Rasmussen said.
Combined with limited recycling in recent years, the average age of crude tankers increased to 12.8 years, the highest in 26 years.
Nineteen percent of crude tankers are now 20 years old or older and contribute 18 percent of crude tanker capacity, making them prime candidates for recycling in the coming years unless they are kept operating as part of the parallel fleet.
Following the exceptionally low activity in 2022, contracting of new ships rebounded in 2023 and 2024. The order book/fleet ratio has therefore climbed from a low of 2.8 percent in early 2023 to 10.4 percent at the start of 2025, BIMCO said.
The order book extends into 2028 and could add an average of 2.5 percent capacity per year to the fleet during the next four years. As global oil demand growth is slowing, fleet growth should be able to match demand growth even if recycling of the oldest ships accelerates.
Not only would the average age of the crude tanker fleet fall but the fleet renewal would also help decarbonize the fleet. Only 3.6 percent of crude tankers can use alternative fuels while 2.7 percent are readied for a later retrofit. The order book shows 18 percent of ships to be delivered will be able to use alternative fuels while 29 percent will be readied for easier retrofit.
“Low deliveries and recycling of ships have caused the crude tanker fleet to age considerably. Higher newbuild contracting during the last two years, however, can accelerate both the renewal and decarbonization of the fleet in the coming years, especially if the oldest ships are recycled at the same time,” Rasmussen said.

Tags: BIMCO