World Tanker Fleet Capacity Stretched

The current demand for oil, the phase out of single-hulls for safety and environmental issues, the OPEC production increase of a million barrels per day to 10 million barrels per day, and the backlog of shipyards building new double-hulls has put the world's current tanker fleet in high demand.

Also impacting the world's tanker fleet is security, which has also become a high priority, as tankers and loading facilities have become targets of Al Qaeda and other terrorist groups. All of these events are occurring while the impending International Ship and Port Security (ISPS) measures are ready to be enforced on July 1st have created great concern within the tanker industry as well.

"At no other time in history have all of these factors happened simultaneously to make this market this tight," said Dragos Rauta, Technical Director of Intertanko, the trade association for tanker operators.

An attack on a tanker which cripples even one big taker could have a devastating impact on the flow of crude oil say experts, while the new security regulations do nothing to address an attack at sea on a tanker, like that of the French tanker "Limburg."

In October, 2002, a small boat loaded with explosives came up next to the "Limburg" off of Yemen and detonated, blowing a hole in the hull. Almost 100,000 barrels of crude oil spilled out and burned. The attack killed a "Limburg" crew member and all aboard the small boat. The attack was attributed to Al Qaeda.

Today, there are an estimated 3,600 tankers in service throughout the world, and about 435 of them are considered very large crude carriers or VLCCs, which can transport 2 million barrels. The VLCCs are completely booked, and the next level of tankers known as Suez Max tankers, is also booked.

The world's shipyards are booked to capacity, and most of the new orders for VLCC double-hulled tankers won't be delivered until 2007 and 2008.