Tanker Orders Increase 32% Year-on-Year

Values for Tanker newbuildings have also increased across all subsectors. LR2s of 115,000 DWT show the biggest leap, up by c.7.31% from the start of the year from USD 69.11 mil to USD 74.16 mil, as values for this sector maintain their upwards trajectory and hover around the highest levels since 2008.

Figure 1: Values for Tanker newbuildings over the last five years, showing the percentage increase in values over the past three months. 

Of the Tankers ordered this year, the majority were in the MR sector, accounting for c.37%, followed by VLCCs with c.31%, Suezmaxes with c.19%, and LR2s with 12%, respectively. Aframaxes were in fifth place with just 1% of all orders placed this year. No LR1 orders were reported. More than half of these orders have been placed at Chinese yards with a share of c.57%, South Korea ranks second with a share of 36%, and Vietnam rank third with 6%. Japan accounts for just 1% of Tanker orders placed in 2024 to date. 

Greek buyers have been the most active in ordering Tankers with 28 orders placed this year, mainly in the Suezmax sector. They’re followed by Indonesia as Pertamina ordered 15 MR Tankers in January of this year, scheduled to be built at Hyundai Mipo and delivered in 2026, contracted for USD 47,75 mil each, en bloc, VV value USD 48.99 mil each. Bermuda placed the third highest number of orders, with a total of eight. 

This increase in demand for new Tankers comes as owners seek to renew ageing fleets and seize the opportunity to order vessels able to meet the latest environmental regulations. In addition, KYC on secondhand sales is becoming stricter in order to clamp down on those who continue to carry sanctioned cargoes. Securing a new building allows for a clean title on a ship, which puts the owner in a strong position for any future transactions. Positive sentiment for this sector going forward is also a key driver for new orders.

Firm earnings over the last few years, due to increased tonne mile demand, has also provided support to the Tanker sector, currently led by VLCC earnings which are around 44,800 USD/Day for one year, an increase of c.6% year-on-year. Geopolitical uncertainties have buoyed earnings in the Tanker sector along with an improved demand outlook. Disruption in the Suez Canal as a consequence of the Houthi attacks on the Red Sea has forced owners to travel longer distances; this has firmed earnings for Crude, combined with the increase in tonne-mile demand due to changes in trade flow patterns that have arisen as a result of sanctions on Russian oil cargoes. 

Notable recent Tanker newbuilding contracts include four MR2 Tankers of 50,000 DWT ordered by EuroGreen Maritime, scheduled to be built at Wuhu Xinlian Shipbuilding and delivered in 2026, contracted for USD 63 mil each en bloc, VV value USD 59.86 mil each. Also, Union Maritime have ordered two LR2 Tankers of 115,000 DWT, scheduled to be built at Hyundai Vietnam and delivered in 2027, contracted for USD 71 mil each, VV value USD 71.01 mil each. 

Author: Rebecca Galanpoulos Jones, Senior Content Analyst, Veson Nautical