Anti-Trust/Competition Law Compliance Statement INTERTANKO’s policy is to be firmly committed to maintaining a fair and competitive environment in the world tanker trade, and to adhering to all applicable laws which regulate INTERTANKO’s and its members’ activities in these markets. These laws include the anti-trust/competition laws which the United States, the European Union and many nations of the world have adopted to preserve the free enterprise system, promote competition and protect the public from monopolistic and other restrictive trade practices. INTERTANKO’s activities will be conducted in compliance with its Anti- trust/Competition Law Guidelines.

The tanker market What to watch Manager Research and Projects Singapore 20 April 2007

Tanker market – What to watch? Fragile demand? Product taking market share from crude? Chemical market – demand increasing Supply growth -phase out 2010

Average annual tanker freight rates $/day

Tanker market What to watch ahead? –Economy US/China –Demand for tankers Increase oil demand – concentrated to few areas New refineries - structural changes in trade? Pipelines Oil supply – more from Middle East? New technology/politics (biofues) –Supply of tankers Orderbook Phase out 2010 Productivity

GDP growth % What to watch: No growth in oil demand OECD despite positive growth !

Seaborne oil trade - wet and dry bn tonne miles What to watch: Higher increase in product tanker demand than crude tanker demand !

Increase in world oil demand in ME*, USA, China and ROW** mbd Source: IEA FSU: Other Asia: L America: Africa: What to watch: Major part of demand from few areas !

Source: IEA Sources of OECD Asian oil imports mbd To watch: Oil from Sakhalin Russian pipeline Eastwards Malaysian pipeline? !

Source: IEA Chinese oil import by source 3 mbd ! To watch: Oil from Venezuela Russian pipeline Refinery development

mbd Source: IEA Sources of US oil imports - mbd ! To watch: Oil from Canada Domestic production

mbd Source: IEA Sources of European oil imports - mbd ! To watch: N Sea oil production down Flat demand Products instead of crude?

World oil supply - mbd Source: BP/INTERTANKO mbd ! To watch: Middle East North Sea decline Russia Eastwards

FSU petroleum export Source: BP/INTERTANKO mbd ! To watch: New pipelines east/west/Druzhba Sakhalin

Product tanker demand

World product trade m tonnes Source: BP review ! To watch: Oil from Venezuela Russian pipeline

World oil consumption and refinery capacity mbd Source: IEA ! To watch: Tightening refinery capacity until 2009 New export refineries India/ME

World refinery development mbd Source: BP Review/various ! To watch: New export refineries India/ME Where will the markets be

US gasoline imports mbd Source: EIA

European products imports - mbd mbd Source: IEA

Product tanker demand What to watch? –Chinese product shortage? –Bio-fuels - US in particular 40% of US gasoline includes ethanol = 0.4 mbd – 2.3 mbd of ethanol by 2017? –Refinery expansion Middle East India China US …

Chemical tanker demand

Major capacity additions coming on-stream next year Export ex Middle East Gulf/Pakistan/WC India Source: Inge Steensland Shipbrokers

The Middle East Gulf build up of export capacity Source: Inge Steensland Shipbrokers

Middle East/WCI/Pak exports by destination Excluding coastal India movements Source: Inge Steensland Shipbrokers

Main products traded on chemical tankers Average annual growth rate: 5% (assumed in forecast) Source: Inge Steensland Shipbrokers

Some segments more popular than others… Core and swing chemical fleet by size, age, and orderbook Source: Inge Steensland Shipbrokers

Chemical tanker demand What to watch? –Middle East expansion –Conversion to DH (80+ ships) –Ethanol –Fleet expansion

Tanker Supply

Tanker contracting $ bn m dwt VLCC $ bn Suezmax: 5.9 ” Aframax: 9.4 ” Panamax: 2.7 ” 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

VLCC max phase out + 4.5% trade increase, assume balanced marked end 2006number Fleet: 142 m dwt Orderbook: 54 m dwt/177 Single hull: 42 m dwt/154 Order/SH: +12% Average age: 9.4 years To watch: Storage Waiting time SH !

Suezmaxes max phase out + 4.5% trade increase, assume balanced marked end 2006number Fleet: 52 m dwt/348 Orderbook: 20 m dwt/127 Order/SH: +9% Single hull: 9 m dwt Average age: 9.2 years

Aframaxes max phase out + 4.5% trade increase, assume balanced marked end 2006number Fleet: 72 m dwt/713 Orderbook: 30 m dwt/270 Orders/SH: +17% Single hull: 14 m dwt Average age: 10.2 years

Panamaxes max phase out + 4.5% trade increase, assume balanced marked end 2006number Fleet: 21 m dwt/309 Orderbook: 9.6 m dwt/133 Orders/SH: +10% Single hull: 5.3 m dwt Average age: 10.5 years

Tankers 30, ,999 dwt max phase out, + 6 % trade increase, assume balanced marked end 2006number

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

Fleet development m dwt

Tanker fleet double-hull development%

Oil import by VLCCs - share of double hull % Source : Fearnleys

Tanker supply Record investments 2006 Deliveries, phase out Surplus building up? Conversions Two tier market – inefficiency Increased docking time

Conclusion High economic growth Changing environment for tankers? Many wildcards Things better than expected?