Less favourable tanker market conditions in the coming years are expected to constrain further growth in contracting from 2025 to 2028

Leading research and consultancy provider Maritime Strategies International (MSI) forecasts that tanker contracting in 2024 will reach its second highest level ever.

The first 11 months of 2024 saw near-record levels of tanker contracting, with 55m dwt ordered second only to the super-cycle year of 2006.

MSI’s proprietary market model for 10,000dwt+ tanker orders has been revised up 20% by 10.2m dwt for 2024 versus its previous forecast. With a projected total of 60.8m dwt, 2024 is almost certain to record the second-highest level ever.

Deliveries in 2025 are anticipated to rebound with 19.4m dwt expected to hit the water, with the majority (around 12m dwt) due in the second half of the year. From this point onward, deliveries will increase significantly due to the surge in contracting seen in 2023-2024, with 2026 deliveries rising to 37m dwt.

January to November saw 22m dwt added to VLCC orderbook – all scheduled to be built in Chinese shipyards – with five units on average ordered monthly from July to November. Chinese owners also made up the majority of new orders in H2 2024, from European and Middle Eastern owners having ordered the majority in H1.

Suezmax contracting was low between August and September, with only two vessels ordered during that period. Uncoated Aframax orders have stalled entirely, with no new orders placed since September.

This is in contrast to LR2 contracting, which had been particularly strong. However this slowed in October, with around 0.5m dwt ordered each month, down from an average of 1.3m dwt ordered monthly from January to October 2023.

“The most ‘foreseeable’ factor in any forward view of shipping markets is always vessel deliveries, at least over the coming one or two years and as contracting volumes continued to rise, so has pressure to the outlook,” said MSI Director Tim Smith. “MSI believes new vessel deliveries will outweigh anticipated scrapping, acting as a drag on the utilization rate across the forecast period.”