Gradual release of 6.4 mdwt of Iranian floating storage vessels over 18 months adds 1.5% to dirty tanker operating fleet growth, just as supply peaks in late-2016 and early-2017. Even with slippage, yards should deliver almost 60 VLCCs during 2h16 and 1h17, which is enough to move 2.4 mbpd of crude between the AG and Asia. Owners may be slow to scrap in 2016, but demolition should accelerate in 2017, bringing growth back to 2% by late-2017.
Ecstatic over lofty tanker earnings brought on by OPEC policy largesse — and convinced that this is the start of a broad, cyclical recovery — owners once again ordered too many crude tankers in 2015. Their justification was a simplistic hypothesis about inter-basin crude flows, but shifts in global production, refining and imports suggested that the sector was a 1% growth business, at best. Given the orderbook size, the results were predictable. Download 28-page summary section of 128-page presentation here.
