More than 25% of the active tanker fleet, i.e., one quarter, is set to reach 20 years of age by 2023, creating quite a scrapping candidate list going forward.
Data from VesselsValue shows that of the 13, 211 tankers in its data base, including small tankers, over 3,000 are 20 years old and older.
Coupled with over 570 ships that are currently 18 and 19 years old, the estimate is on point, should low scrapping activity continue to prevail.
With regard to the age profile of tankers of 18+ years, Handy/MR tankers account for the biggest share, followed by VLCCs and Aframax and Suezmax tankers.
Dwindling oil demand caused by the COVID-19 pandemic was expected to reduce the global tanker capacity, as owners were predicted to demolish some of their older tonnage bringing some ease to the market.
The scrapping activity has been greatly impacted by the pandemic as outbreaks and governmental measures shut down shipbreaking operations in Asia.
However, there seem to be some positive developments as old vessel supply has begun to respond to higher steel prices, and scheduled environmental regulations prompting an increase in vessel recycling albeit from very low levels, according to Euronav.
Although demolitions are up from the start of last year, only two shuttle tankers and two Aframax crude oil carriers (0.45 million DWT) have been confirmed demolished in the first two months of 2021, according Clarksons’ data.
This is significantly down from the 1.1 million dwt of crude oil tanker the capacity that left the market in December 2020, BIMCO’s data shows.