Tankers in World Markets

A well-known theme has been woven into the pages of recent special features. It is abundantly clear that there are too many tankers chasing too few cargoes. This theme is especially relevant for the VLCC sector. Given the dismal level of time charter equivalent earnings (TCE) in this sector, no one should be surprised at this obvious revelation.

Any wished-for-improvement in TCEs in the longer term hinges on how well the growth in seaborne oil transportation meshes with the growth in the tanker fleet. Estimates of increasing oil demand over the next few years seem potentially helpful in raising tanker demand. But everyone should realize that these demand outlooks are just guesses based on assessments of a fragile global economy. Moreover, even with the present guesses for oil demand growth, ton-mile demand may not necessarily grow with it in lock-step.