The State of the tanker industry IMSF Singapore 17 April 2007 Manager Research and Projects

The State of the tanker Industry High safety Low pollution Low age High earnings – until now Surplus of tonnage building up

Pollution rate 1000 ts spilt per bn tonne miles carried Source: ITOPF/Fearnleys 1000 ts spilt bntonne-m

Tanker accidents and trade Source: ITOPF/Fearnleys 1000 ts spilt Bn tonne-miles trade Ship nameYearPollut.ion Torrey Canyon67119 Amoco Cadiz78223 Exxon Valdez8937 ABT Summer91260 Haven91144 Aegean Sea9274 Braer9385 Sea Empress9672 Erika9920 Prestige0263 Tasman Spirit0330

Tanker incidents by cause Q07 Number incidents Source: Based on incidents reports from Informa

Tanker incidents by cause 2006 Source: Based on incident reports from Informa

Accidental pollution from tankers largest accidents and age Source: Informa/INTERTANKO Number incidentsAverage age

Total losses, tankers and bulkers Source: Clarkson Number

Tanker Market

Oil price and VLCC freight rates $ per day freight rate$ per barrel oil price

VLCC spot and break-even rates $ per day freight rate

VLCC break-even rates $ per day freight rate

Source: INTERTANKO Oil price and freight rate $/barrel Deflated by the Consumer Price Index (USD)

Source: INTERTANKO Gasoline price at the pump $ per litre

mbd Source: IEA World oil demand - mbd

litres Source: BP Review Oil consumption per capita

mbd Oil consumption if world populations consumed oil as Americans

Seaborne oil trade and Middle East oil production mbd Source: Fearnleys/IEA '000 bil tm

Seaborne oil trade and tanker fleet Source: Fearnleys/IEA

Tanker productivity – tonne-miles/dwt Source: Fearnleys/IEA

Source: IEA Sources of Asian oil imports

mbd Source: IEA Sources of European oil imports - mbd

mbd Source: IEA Sources of US oil imports - mbd

Increase in world oil demand in ME*, USA, China and ROW** mbd Source: IEA FSU: Other Asia: L America: Africa: +0.06

World oil supply - mbd Source: IEA mbd

Tanker Supply

Tanker contracting $ bn m dwt VLCC $ bn Suezmax: 5.9 ” Aframax: 8.8 ” Panamax: 2.8 ” Handy: 22.9 ” (43%) Source: INTERTANKO/Clarkson Shipyard Monitor

Tanker fleet, orderbook and phase out tankers above 30,000 dwt m dwt 79 m dwt133 m dwt

Phase out SH tankers above 30,000 dwt m dwt

VLCCs max phase out,+ 4.5% trade increase, assume balanced marked end 2006Number Fleet: 142 m dwt 487 ships Orderbook: 54 m dwt 177 ” Single hull: 42 m dwt 154 ” Average age: 9.4 years

Suezmaxes max phase out + 4.5% trade increase, assume balanced marked end 2006 m dwt Fleet: 52 m dwt Orderbook: 20 m dwt Single hull: 9 m dwt Average age: 9.2 years Surplus end 2007: 1.8 m dwt ” 2008: 2.6 m dwt ” 2009: 8.1 m dwt ” 2010: 3.7 m dwt

Conversion to DH Total 7. 2 m dwt Built VLCCsTotal 1970s Total Conversion to FPSO/FSO/bulk carriers, heavy lift …. (1.9 m dwt in 2006, 1.2 m dwt so far 2007

Tanker deliveries, removals, min phase-out m dwt

Tanker deliveries, removals, max phase-out m dwt

Tanker fleet double-hull development Source: INTERTANKO %

Tanker deliveries, removals, max phase-out m dwt

Conclusion Strong safety performance Relatively strong demand development Very strong fleet increase Reduced earnings