1. Tanker Markets Overview
31 May 2010, Jeddah
Peter M Swift,
MD, INTERTANKO

2. 300 + associate members: 260 + members operating ca. 3,100 ships
INTERTANKO Today
260 + members operating ca. 3,100 ships
> 75% of the independent oil tanker fleet and > 85% of the chemical carrier fleet
300 + associate members:
in oil and chemical tanker related businesses
15 Committees – 5 Regional Panels
Principal Offices – London and Oslo
Representative Offices in US, Asia and Brussels
Observer Status at IMO, IOPC, OECD and UNCTAD
International Association of Independent Tanker Owners

3. Global dependence on oil tanker transportation
World Oil Consumption 3.8 billion ts
Transported by sea 2.4 billion ts
> 60% transported by sea
                                    
                     

4. Tanker shipping today - an industry to be proud of
Safe
Environmentally responsible
Energy efficient
Cost effective

5. Accidental oil pollution from tankers
1000 ts spilt
1000 bn tonne miles trade
Based on ITOPF/Fearnleys

6. Tanker Shipping’s GREEN Credentials
This car, weighing one tonne, uses 1 litre of fuel to move 20 kms
This oil tanker uses 1 litre of fuel to move one tonne of cargo 2,500 kms
more than twice as far as 20 years ago

7. Oil price and freight rates 1970-2010 – real and nominal
USD per barrel
In general the CO2 emission has developed in line with energy consumption, which again has developed according to the population the growth in the population.
Over the last years oil consumption has developed stronger that the population growth because the strong economic growth in large countries such as Russia, India and in particular China .
Cos emission has also developed stronger than energy consumption because coal increased its part of energy consumption.
The strong growth in seaborne trade can firstly be attributed to the strong import to China of raw materials and the strong growth in finished good from China to Europe and the US.
Source: OPEC/US pub. stats

8. Investment in New Tonnage - Move to Double Hulls
More than USD 500 billion invested since 2000 with the result that ~95% of tanker fleet* double hulled by end 2010
* over 10,000 dwt

9. Average age tanker fleet above 10,000 dwt
Years
Based on LRFairplay

10. Key Challenges for Tanker and other Ship Owners Today
Establishing and maintaining an international framework of consistent regulations and standards
Delivering best environmental performance
Ensuring availability of good people (and quality ships)
Ensuring the welfare and well-being of ships’ crews
Meeting the challenges of Piracy

11. Key Environmental Challenges
Air emissions
- Green House Gases
- Exhaust Gas emissions (Annex VI & its revisions)
- VOC emissions
Spill Prevention and Response Planning
Ballast Water management
Biofouling
Antifouling systems
Ship Recycling
Port Reception Facilities (adequacy & affordability)
Waste management (onboard and ashore)
Radiated Noise pollution
Cetacean strikes

12. Tanker Markets Today ?
Demand down, but recovering ?
Supply up, and still growing ?
Rates down, and ?

13. Tanker Markets Today Demand : World oil trade
Supply : Ships on Order & Fleet development
Tanker market
Shipbuilding capacity

14. World Oil Demand vs. GDP Source: Clarksons (September 2009) 6 5 4 3 2-4 -3 -2 -1 1 2 3 4 5 6
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
% change (year on year)
IMF GDP
Oil Demand
Source: Clarksons (September 2009)

15. Pacific Ocean Pipeline
Demand uncertainties
Global or regional economic stagnation
New pipelines
Natural and other disasters
Climate Change legislation
Oil price
Inventory levels
Eastern Siberian
Pacific Ocean Pipeline

16. Orderbook Development (All ship types)
Orderbook – All ships (>999GT)
Source: Clarksons, April 2010

17. Orderbook by ship type (as % existing fleet)
Source: Clarksons (September 2009)

18. Tanker Contracting 1996-2010 Source: Clarksons, April 2010 10 20 30 4010 20 30 40 50 60 70 80 90
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
million deadweight
Handy MR
Panamax
Aframax
Suezmax
VLCC
Source: Clarksons, April 2010

19. Newbuilding Tanker Prices30 60 90
120
150
180
Jan-76
Jan-78
Jan-80
Jan-82
Jan-84
Jan-86
Jan-88
Jan-90
Jan-92
Jan-94
Jan-96
Jan-98
Jan-00
Jan-02
Jan-04
Jan-06
Jan-08
Jan-10
$ million
VLCC
Suezmax
Aframax
Panamax
MR Product
Source: Clarksons, April 2010

20. Tanker Fleet Development50
100
150
200
250
300
350
400
450
500
550
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
deadweight (million)
10-24 tanker
handy MR
Panamax
Aframax
Suezmax
VLCC
Source: Clarksons (September 2009)

21. Tanker Age Profile Source: Clarksons, April 2010 500 400 300 200 100
100
200
300
400
500
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
no of vessels
Handy MR
Panamax
Aframax
Suezmax
VLCC
Source: Clarksons, April 2010

22. Tanker Fleet Comparisons12 6 5 9 19 38 33 21 29 13 20 69 68 73 75 58 10 30 40 50 60 70 80
VLCC
Suezmax
Aframax
Panamax MR
Handy
percentage of exisiting fleet
non-double hull
On Order
Built since 2000
Source: Clarksons, April 2010

23. Where next for Single Hull Tankers ? Current trading status0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
VLCC
Suezmax
Aframax
Panamax MR
Handy
Total
Fleet
% of single hull fleet
Storage%
Inactive%
Domestic
Trading%
Normal
Source: Clarksons, April 2010 (datasource: Clarksons/LLI)

24. Where next for Single Hull Tankers ?
Trading beyond 2010 ?
Flag/Port State positions re MARPOL 13G trading up to the age of 25 years
Bahamas Yes
Barbados Yes
Liberia Yes
Marshall Isl. Yes
Panama Flag Yes
Japan Yes
Singapore Yes
India Yes
Hong Kong Yes**
(** Max. 20 years old)
Australia No
China No
EU No
Mexico No
Romania No
S Korea No*
Philippines No*
UAE No*
(*No official note
sent to IMO yet)
Notes
1. Naturally understands the concerns associated with and threats posed by oil transportation, with the reminder that the accidental pollution and incident records have shown very considerable and sustained improvements for more than 10 years.
2. Stresses the imperative that all involved maintain strict adherence to international (maritime) law and review processes.
3. Advocates the conducting and completion of an impartial, comprehensive accident investigation. Stresses the necessity, before any new measures are proposed or introduced, for rigorous analysis and understanding of the risks and consequences involved based on sound technical grounds, and where appropriate encourages a full impact analysis of each such measure.
4. As a matter of principle, rejects unilateral and/or regional, ill-considered, (and frequently expeditious/opportunistic and reactionary) measures.
5. Reminds that shipowners receive only a very small proportion of the economic benefit from oil supply and distribution, and that the principal beneficiaries in this value chain are oil companies and traders.
United States N/A
(OPA90)

25. Average tanker freight rates (based on the Baltic rates)
USD/Day
In general the CO2 emission has developed in line with energy consumption, which again has developed according to the population the growth in the population.
Over the last years oil consumption has developed stronger that the population growth because the strong economic growth in large countries such as Russia, India and in particular China .
Cos emission has also developed stronger than energy consumption because coal increased its part of energy consumption.
The strong growth in seaborne trade can firstly be attributed to the strong import to China of raw materials and the strong growth in finished good from China to Europe and the US.
Source: Baltic Exchange/INTERTANKO
May 2010

26. Lower Freight Rates & Fleet surpluses
Implications ?
Challenge to maintain quality and standards, - e.g. maintenance, training
Challenge to address the issues of the day – e.g. including environmental challenges
Potentially made even worse if new ships are of low standard ?

27. Shipbuilding capacity
A future unknown factor !

28. Shipbuilding output and forecast
m cgt
In general the CO2 emission has developed in line with energy consumption, which again has developed according to the population the growth in the population.
Over the last years oil consumption has developed stronger that the population growth because the strong economic growth in large countries such as Russia, India and in particular China .
Cos emission has also developed stronger than energy consumption because coal increased its part of energy consumption.
The strong growth in seaborne trade can firstly be attributed to the strong import to China of raw materials and the strong growth in finished good from China to Europe and the US.
Source: Worldyards/INTERTANKO Aug 09

29. Shipbuilding output potential
m cgt
In general the CO2 emission has developed in line with energy consumption, which again has developed according to the population the growth in the population.
Over the last years oil consumption has developed stronger that the population growth because the strong economic growth in large countries such as Russia, India and in particular China .
Cos emission has also developed stronger than energy consumption because coal increased its part of energy consumption.
The strong growth in seaborne trade can firstly be attributed to the strong import to China of raw materials and the strong growth in finished good from China to Europe and the US.
Worldwide estimates in m cgt
- small and big ships (Aug 09)
Source: Worldyards/INTERTANKO Aug 09

30. Shipyard output potential - surplus
Implications ?
Distressed sales / lower prices
Quality and standards maintained or weakened
Pressure on suppliers and sub-contractors
Greater customer focus & customisation
and any government interventions ?

31. Market Forecast !

32. Market Forecast ! or

33. اﺮﻜﺷ Thank you For more information, please visit: www.intertanko.com
London, Oslo. Washington, Singapore and Brussels

34. Tanker Incidents and accidental pollution
Number incidents
‘000 ts pollution
Based on data from LMIU, ITOPF + others

35. Fleet Growth *Includes slippage, cancellation and removal ideas-5 5 10 15 20
VLCC
Smax
Amax
Pmax MR
Handy
% change y-o-y
2009
2010
2011
*Includes slippage, cancellation and removal ideas
Source: Clarksons, April 2010

36. VLCCs* deliveries and deletions
Number
In general the CO2 emission has developed in line with energy consumption, which again has developed according to the population the growth in the population.
Over the last years oil consumption has developed stronger that the population growth because the strong economic growth in large countries such as Russia, India and in particular China .
Cos emission has also developed stronger than energy consumption because coal increased its part of energy consumption.
The strong growth in seaborne trade can firstly be attributed to the strong import to China of raw materials and the strong growth in finished good from China to Europe and the US.
1966 Idemitsu Maru, the first VLCC delivered by IHI, 206,000 dwt
1976 Seawise Giant, the largest tanker delivered by Sumitomo H.I , 564,650 dwt
1974 the largest number of VLCCs delivered, 124
1982 only one VLCC was delivered
*Here VLCCs include all tankers above 200,000 dwt
** trading include short term storage, not lay-up or long term storage
Source: INTERTANKO , LR Fairplay current fleet, Clarkson deliveries

37. Tanker sales for demolition and VLCC freight rate
USD / day
m dwt 6 12 18 24 30 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
09*
20,000
40,000
60,000
80,000
100,000
VLCCs sales for demolition
<200,000 dwt sales for demolition**
VLCC freight rate***
In general the CO2 emission has developed in line with energy consumption, which again has developed according to the population the growth in the population.
Over the last years oil consumption has developed stronger that the population growth because the strong economic growth in large countries such as Russia, India and in particular China .
Cos emission has also developed stronger than energy consumption because coal increased its part of energy consumption.
The strong growth in seaborne trade can firstly be attributed to the strong import to China of raw materials and the strong growth in finished good from China to Europe and the US.
* Until week ending 4 September
** Sales for demolition until 4 September
*** Clarkson Freight rate AG-Japan week ending 4 September
Source: INTERTANKO