Product Tanker Fleet to Reach 16-Year High in 2025

BIMCO's latest report indicates significant fleet capacity growth expected in the product tanker sector in 2025. New ship deliveries are projected to reach 12 million deadweight tons (DWT); this represents a 256% increase compared to 3.4 million DWT in 2024.

This growth emerges as a result of intense contracting activity conducted during 2023-2024. Over this period, a total of 551 new ship orders with a combined 38.7 million DWT capacity were placed; this figure significantly exceeds the previous decade's annual average of 122 ships.

The order book expanded to 41.2 million DWT during this process, with the order book-to-fleet ratio rising from 6% to 22% within two years.

When examined by segment, MR tankers led by unit count with 278 new orders, while the LR2 segment achieved the highest capacity with 19.2 million DWT. The 2025 delivery programme includes 98 MR and 52 LR2 tankers; these represent 4.9 million and 6.0 million DWT respectively.

However, this fleet renewal also brings environmental concerns. Only 7% of vessels scheduled for delivery in 2025 are capable of using alternative fuels, while 12% are suitable for retrofit. Limited adoption of green technologies and low scrapping rates are intensifying environmental concerns.

BIMCO's Chief Shipping Analyst Niels Rasmussen notes that low scrapping activity has led to an aging fleet. Rasmussen states, "Low scrapping activity over the past five years has resulted in an excess of older vessels. Currently, 10% of fleet capacity consists of vessels older than 20 years."

BIMCO's analysis also signals challenges for the market. While fleet growth is expected to reach 5-6% levels in 2025, slowing oil demand growth could result in decreased tanker demand. Additionally, ongoing global issues such as sanctions against Russia and geopolitical tensions in the Red Sea may delay the retirement of older vessels, causing market imbalances.

Key Points:

• Product tanker fleet capacity is expected to reach 12 million DWT in 2025, with this growth representing the highest level in the past 16 years. BIMCO Home

• During 2023-2024, a total of 551 new ship orders with a combined capacity of 38.7 million DWT were placed; this significantly exceeds the previous decade's annual average of 122 ships. BIMCO Home

• The order book-to-fleet ratio increased from 6% to 22% within two years. BIMCO Home

• Only 7% of vessels scheduled for delivery in 2025 are capable of using alternative fuels, while 12% are suitable for retrofit. BIMCO Home

• 10% of fleet capacity consists of vessels older than 20 years, indicating an aging fleet. BIMCO Home

• Slowing oil demand growth and geopolitical tensions may lead to decreased tanker demand and market imbalances. BIMCO Home

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News Link: https://gcaptain.com/product-tanker-fleet-growth-to-hit-16-year-high-in-2025-bimco-reports/

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