Crude oil tanker deliveries in 2024 have fallen to their lowest level in 36 years, with just 17 new vessels joining the global fleet. These new additions represent a combined capacity of 2.5 million deadweight tonnes (DWT), according to BIMCO. This marks a sharp 74% decline in capacity compared to the previous year.
The slowdown is most noticeable in the fleet’s growth, which has slowed to just 0.2% in 2024. This is the slowest expansion in 23 years. While the Aframax and Suezmax segments saw modest growth of 0.5% and 1.1%, respectively, the VLCC segment actually shrank by 0.2%. The VLCC contraction is attributed to vessel recycling and the lack of new deliveries.
Niels Rasmussen, BIMCO’s Chief Shipping Analyst, points to a significant drop in contracting activity in 2022 as the root cause of this trend. “In 2022, contracting fell to just 3.2 million DWT, 83% lower than the average over the last decade. This happened despite higher earnings due to longer voyages caused by Russian sanctions,” Rasmussen explains.
The lack of new deliveries and the low rate of recycling have resulted in the average age of crude tankers rising to 12.8 years, the highest in 26 years. Vessels aged 20 years or older now make up 19% of the fleet and account for 18% of total capacity. This could signal a wave of recycling in the coming years.
On a more optimistic note, the industry is showing signs of recovery. The order book for new tankers has rebounded since 2023, with the order book-to-fleet ratio increasing from 2.8% to 10.4% by early 2025. Over the next few years, the sector could see an average annual capacity increase of 2.5%, in line with slower global oil demand growth.
The fleet renewal also offers a chance for decarbonization. While only 3.6% of current crude tankers are capable of using alternative fuels, this figure is expected to rise. About 18% of new vessels will be built to use alternative fuels, with an additional 29% designed for future retrofitting.
Rasmussen adds, “The aging fleet due to low deliveries and recycling presents a challenge. However, increased contracting for new vessels in the past two years can help speed up both the renewal and decarbonization of the fleet, especially if the oldest ships are recycled simultaneously.”
Related Topics:
- What Is the WTI Crude Oil Price Today ((January 20)
- What Is the Brent Crude Oil Price Today ((January 20)
- Alberta Pledges to Challenge Federal Restrictions on Oil Exports