Worldwide Oil Tanker Scrapping (12935 bytes)
The International Association of Independent Tanker Owners (Intertanko), Oslo, expects a 1.2 million b/d increase in world oil demand in 1995 to help boost profits for tanker owners after a relatively lean 1994.
Intertanko said average freight rates in 1994 were lower than for 1993, with many very large crude carriers (VLCCs) trading at levels below operating costs.
"I expect the increase in freight rates toward the end of 1994 will continue into 1995," said Erik Ranheim, chief economist at Intertanko, "even if continued volatility and a slump in the spring must be anticipated."
Ranheim's outlook is based on anticipated scrapping of at least 30 VLCCs during 1995. Behind his guarded optimism is record scrapping of oil tankers during 1994, amounting to a total 17 million dwt, including 42 VLCCs.
Because of this high level of scrapping, said Intertanko, "...the tanker fleet has been reduced by some 6 million dwt or 2% in 1994. The bulk of the reduction concentrates on tankers above 100,000 dwt."
Pakistan emerged as the biggest scrapper of 1994, taking over the lead role previously held by China. Intertanko reckons India, Pakistan, Bangladesh, and China can scrap a total 60 VLCCs/year if necessary.
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