The product tanker sector is preparing for a significant increase in fleet capacity, with newbuild deliveries projected to reach 12 million deadweight tonnes (DWT) in 2025. This surge, amounting to a 256% increase from 2024’s 3.4m DWT, is a pivotal topic for maritime industry stakeholders.
Understanding the Fleet Growth
According to BIMCO, this substantial growth is due to intense contracting activity in 2023-2024, during which 551 new vessels totaling 38.7m DWT were ordered. This figure far surpasses the previous decade’s annual average of 122 ships, leading to an expanded orderbook of 41.2m DWT.
Segment Breakdown
In the segment breakdown, 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 accounting for 4.9m DWT
- 52 LR2s accounting for 6.0m DWT
Environmental Concerns
Despite this growth, BIMCO raises environmental concerns. 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, is alarming.
BIMCO’s Chief Shipping Analyst Niels Rasmussen notes, “The low recycling activity during the past five years has created an overhang of older ships. Currently, 10% of the fleet’s capacity is comprised of ships older than 20 years.”
Market Challenges Ahead
BIMCO’s analysis suggests several market challenges:
- Fleet growth is expected to reach 5-6% in 2025, but slowing oil demand growth may reduce tanker demand.
- Ongoing geopolitical issues, including Russian sanctions and Red Sea disruptions, could postpone older vessel retirement, potentially creating market imbalances.
Conclusion
The product tanker sector is on the brink of substantial fleet growth, but environmental and market challenges loom large. Stakeholders must address these concerns to ensure sustainable and balanced growth in the maritime industry.
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