Gibson: 70+ VLCCs Poised for Delivery in 2019

VLCCIllustration; Image Courtesy: Euronav

Over 70 newbuild very large crude carriers (VLCCs) are scheduled for delivery next year, once slippage from 2018 is accounted for, data from Gibson shows.

Out of these, 24 are due in the first quarter of 2019.

The strong supply sets a negative tone in the tanker market, especially in the wake of announced OPEC production cuts, which Gibson believes will keep tanker owners bearish at least in the first half of next year.

Some ease is expected from the potential for as many as 60+ VLCCs to go in for scrubber retrofitting at some stage next year, creating supply disruption.

However, on an annualized basis this may only account to the equivalent of just 4- 6 VLCCs taken out of the fleet, if it is assumed each retrofit takes 1 month, Gibson said.

“Of course, there are sensitivities on timings; if the bulk of the retrofits are concentrated in the second half of 2019 then the impact might appear greater, but on balance the significance could be limited. It also needs to be considered that some retrofits may take place during natural dry dockings, whilst this does not negate the impact, it must be considered that each year a certain number of dry dockings take place anyway,” the shipbroker added.

As explained, the potential downside is not just for VLCCs, as all crude carriers are likely to be impacted.

Beyond OPEC cuts, for the Aframaxes, the key downside risk is lower production from Russia. Suezmaxes will also be impacted by lower exports from the Middle East, Russia and perhaps West Africa with Nigeria now willing to participate in the deal.

Nevertheless, it is likely that the crude supply from the Americas will compensate for the portion of OPEC cuts, boosting at the same time tonne-mile demand. But Gibson is not sure whether the anticipated 1.1 million barrels per day increase in oil production from the Americas will be sufficient to absorb the expected fleet growth.

Share this article

Follow World Maritime News

In Depth>

Events>

<< Aug 2019 >>
MTWTFSS
29 30 31 1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31 1

World Gas Series: Morocco Summit

Bringing together key players in the gas value chain in Morocco, the World Gas Series:

read more >

GreenTech in Shipping USA Forum 2019

GreenTech in Shipping USA Forum is an event for Maritime leaders who want to unlock successful business formula of the industry!

read more >

Shipping Transformation Asia

Shipping Transformation Asia will provide a platform for future-focused discussion in the shipping,…

read more >

Global Sustainable Shipping Forum 2019

The event will provide valuable insights from conference sessions, great networking opportunities and will offer…

read more >