Tanker fleet supply trends - nominal vs real fleet growth

Our latest Monthly Tanker Newsletter discussed tanker fleet utilization trends and fleet supply developments, examining the interplay between nominal and effective (real) fleet supply growth. While YTD2023 has seen real tanker fleet supply growing above nominal, particularly in the VLCC segment, stemming from an increase in average steaming speeds, we expect the trend to reverse in 2024 with real supply growth underperforming nominal to the benefit of VLCCs. Combined with our demand side expectations, as laid out in our September 11th weekly newsletter, for increased oil supplies over the next two years expected to shape a forward curve pricing that will facilitate restocking, probabilities for a favorable market outlook looking forward have increased:

Effective Fleet supply dynamics more favorable to larger sizes looking forward.…In 2024, increased LR2 inefficiencies and their flexibility to switching to crude oil trades are expected to continue to drive effective fleet growth below the currently projected nominal of 2.5%, while the decline of the LR1 fleet is expected to have further positive spillover effects in LR2 deadweight requirements. On the crude tankers side, VLCCs fleet supply trends appear more favorable across segments, as nominal fleet growth is projected at +0.5%, the lowest amongst crude tanker segments and could be further mitigated by declining speeds compared to 2023, as increased VLCC shipments to the EU, where the EU ETS will be into force from 2024 in a phased in way and the CII impact become more pronounced increasing efficiency requirements. Under the assumption of a moderate speed mitigation during 2024, we project effective fleet growth of the combined crude and product tankers of +0.5%, down from +2.6% in 2023.

Points discussed in our Tanker Monthly Newsletter were picked up by Naftemporiki, you can find a English and Greek version of the articles here below.

Signs of a sustained upward rally for super tankers Οιωνοί ανοδικού ράλι διαρκείας για τα super tankers