The tide turns for tanker sector

Lower oil prices and the economic downturn make the outlook less certain for tanker owners, but shipbuilders still have substantial orders on their books

Just a year ago, orderbooks for new vessels were at record highs and growing, driven by an economic boom and high oil prices. The expansion of the global fleet covered all the main vessel types – tankers, bulkers and containers. But with the global economy imploding and oil prices a fraction of what they were, operators are cancelling and delaying orders as demand for oil and shipping falls. The last few months have seen new-building orders cease and the price of vessels drop, as freight rates return to long-term averages. Total new build orders in 2008 were around half the very high levels seen in 2007. Significantly, there were no new orders placed for very-large crude carriers (VLCCs) dur