Supertanker scrapping will speed up

Scrapping of older supertankers with single hulls will speed up as a collapse in rents leaves the vessels unable to find employment, Fearnley Consultants A/S said. Daily returns from hauling 2 million-barrel cargoes of Middle East crude oil to Asia have slid 93 percent since Jan. 19 to $6,538, according to the London-based Baltic Exchange. That’s less than two-thirds of the $11,601 that Drewry Shipping Consultants Ltd. estimates owners need to meet crewing, repairs and other daily running costs.
A global phase-out of single-hulled oil tankers started this year, and a ban by the International Maritime Organization takes full effect in 2015. The number of single-hulled carriers has fallen to 50 from 80 at the end of 2009, Sverre Bjorn Svenning, an Oslo-based analyst at Fearnley, said by phone Monday.
“At one point in time, they will have to make a decision whether to scrap” or seek alternatives that exclude transporting oil, Svenning said, referring to tanker owners. “Single hulls will be without employment” and are already “at the back of the line” when oil companies are seeking to charter vessels, he said.
Supply of the ships in the Persian Gulf, the biggest cargo- loading region for crude oil, is at its highest for at least six years, Imarex ASA, an Oslo-based freight-derivatives broker, said in a report Monday.
Frontline Ltd., the world’s largest operator of supertankers, said May 21 it needs $31,100 a day to break even on the carriers.
Frontline said Monday it is anchoring ships and declining cargoes until the plunge in rental rates is reversed.
Most single-hulled carriers will cease transporting oil in the second half of this year, Svenning said.
The ships make up 10 percent of the global supertanker fleet, according to Lloyd’s Register-Fairplay data on Bloomberg.
The current slump in charter rates stems from a “seasonal” decline in refineries’ demand for crude oil during the Northern Hemisphere summer, according to Svenning.