Zero net fleet growth until at least after 2026 underpins strong supply/demand fundamentals.

Last week, Banchero Costa, a leading Italian shipbroker, updated its Tanker research, providing deep insights into the fleet structure and expected supply development. Banchero’s research forecast 0% net fleet growth in 2024E, 2025E, and 2026E, as expected vessel scrapping offsets the low oncoming supply.

“Red Sea diversions leading to a shortage of oil tankers – Bloomberg”.

The research supports the knowledge that the tanker orderbook is very low, especially on a historical basis. “For 2024, the market expects delivery of just two supertankers, the fewest additions in almost four decades and about 90% below the yearly average [since 2000]” – Bloomberg.

The highly constrained supply conditions are being exacerbated by the conflict in the Red Sea, which drives increasing avoidance of the Suez Canal, a situation made worse following a fresh attack on a UK dry bulk vessel that left the vessel in danger of sinking. The ongoing market situation sees crude tanker rates sitting at historically high levels, looking into a rising ton-mile demand outlook as overall oil demand is forecast to continue growing in 2024, and importantly, the average distances (ton-miles) of seaborne crude trade are also expected to rise.

The ongoing supply/demand fundamentals have been reflected in the second-hand vessel market, with new record prices for a second-hand Suezmax vessel set last week.