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The product tanker sector is bracing for a monumental surge in fleet capacity, with newbuild deliveries projected to reach 12 million deadweight tonnes (DWT) in 2025 – a 256% increase from 2024’s 3.4m DWT, according to BIMCO.
BIMCO data shows this growth results from intensive contracting activity in 2023-2024, during which 551 new vessels totaling 38.7m DWT were ordered, far exceeding the previous decade’s annual average of 122 ships.
The orderbook has subsequently expanded to 41.2m DWT, with the orderbook-to-fleet ratio rising from 6% to 22% over two years.
In the segment breakdown, BIMCO reports that MR tankers led in volume with 278 new orders, while the LR2 segment secured the highest capacity at 19.2m DWT. The 2025 delivery schedule includes 98 MRs and 52 LR2s, accounting for 4.9m and 6.0m DWT respectively.
However, BIMCO highlights environmental concerns with this fleet renewal. Only 7% of vessels scheduled for 2025 delivery will be alternative fuel-capable, while 12% are retrofit-ready. This limited adoption of green technologies, combined with slow recycling rates, raises environmental concerns.
BIMCO’s Chief Shipping Analyst Niels Rasmussen points out that reduced recycling activity has led to an aging fleet. “The low recycling activity during the past five years has created an overhang of older ships,” says Rasmussen. “Currently, 10% of the fleet’s capacity is comprised of ships older than 20 years”.
The analysis from BIMCO suggests market challenges ahead. While fleet growth is expected to reach 5-6% in 2025, slowing oil demand growth may result in reduced tanker demand. Furthermore, ongoing geopolitical issues, including Russian sanctions and Red Sea disruptions, could postpone older vessel retirement, potentially creating market imbalances.
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