Growth slows in global tanker fleet, reports Veson Nautical

The global tanker fleet is expected to grow by only 1.3% supporting charter markets but geopolitical uncertainties and below trend growth in China and Europe may provide headwinds for import requirements, according to Thomas Zwick, Senior Maritime Analyst at Veson Nautical.

Speaking at Veson Nautical’s Dubai Forum, Zwick told delegates that 2024 saw an increasing number of tanker orders, but uncertainty about the future of fuels and high newbuilding prices are slowing the market down in 2025.

He also said that scrapping is forecast to increase this year but is not projected to have a significant impact on net fleet growth.

“Several years of old vessels finding employment in the shadow fleet instead of being scrapped could reverse,” Zwick said. “But as we expect near term rates to be good and the steel price is low, we do not foresee a large amount of activity in 2025.”

He added that orderbook to total fleet ratio was relatively low at 13.8% and this has been largely driven by historically high prices in the newbuilding sector caused by a huge uptick of orders in other sectors, especially the container sector.

“Demand growth still outpacing supply growth but to a lesser degree in 2025,” Zwick said. “The market is starting to show a return to relative normality, but volatility still remains.

Zwick also told delegates that the ongoing uncertainty around oil supply and demand dynamics would continue, but with the recent cuts to oil production by the OPEC+ members set to ease, the market had enough flexibility to absorb most of the potential volatility. This meant that day rates for tankers were around the expected level for this time of year.

“With slower growth in global demand, a normalization of ton-mile growth compared to the past two years, our Base Case concludes on lower earnings across segments this year. While our forecast rates for 2025 are good, digesting continuous news about sanctions does give upside and there will likely be high volatility around projected quarterly averages, with VLCC’s being most exposed to an upside,” Zwick said.