BIMCO: Record High Crude Oil Tanker Deliveries Add Instant Freight Rate Pressure

January 2017 already accounts for 22% of the crude oil tankers previous year’s total deliveries, due to tremendous VLCC delivery growth.

(BIMCO) – On an unprecedented scale, 5.5m DWT of crude oil tanker capacity (up 220% from January 2016), has already been delivered in 2017(according to preliminary data from VesselsValue.com). January 2017 accounts for 22% of the crude oil tankers previous year’s total deliveries. In comparison to the totals of 2015 and 2014, this 2017 figure amounts to 48% and 51%, respectively.

January 2016, in terms of crude oil tanker deliveries of 2.5m DWT, hit record levels in relation to the previous two years. However, that level has been dwarfed by the tremendous amount of deliveries in January 2017.

BIMCO’s Chief Shipping Analyst Peter Sand says:

“This record-high crude oil tanker delivery growth is troubling, and worsens the balance between supply and demand, due to sluggish demolition in this segment.

From January 2014 until January 2017, demolition amounts to only 8m DWT, which represents an astonishingly small proportion of 2.2% of the current crude oil tanker fleet.

This development in January highlights the fact that the crude oil tanker market faces headwind for the current year already.”

Highest monthly number of delivered VLCCs ever

The lion’s share of January deliveries was taken by 12 VLCC deliveries (preliminary figure), which totals 3.68m DWT and represents 67% of the month’s total. To put this into perspective: over 2016, 2015 and 2014 in total– 14.4m DWT, 6.25m DWT and 7.6m DWT of VLCCs were delivered (respectively).

Additionally, 943.000 DWT suezmax and 903.500 DWT aframax vessels were delivered. Resulting in an extraordinary delivery growth of 529% in 2015 and 61% in 2014, in comparison to January 2016.

Showing leadership to the global shipping industry, in 2017 BIMCO will continue its unique series of analysis on the “Road to Recovery” for the crude oil tanker market.

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BIMCO is the world’s largest international shipping association, with 2,200 members in around 130 countries.