1. The State of the tanker industry IMSF Singapore 17 April 2007 Erik.Ranheim@INTERTANKO.com Manager Research and Projects

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

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

4. 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

5. Tanker incidents by cause 1978-1Q07 Number incidents Source: Based on incidents reports from Informa

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

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

8. Total losses, tankers and bulkers Source: Clarkson Number

9. Tanker Market

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

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

12. VLCC break-even rates $ per day freight rate

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

14. Source: INTERTANKO Gasoline price at the pump $ per litre

15. mbd Source: IEA World oil demand - mbd

16. litres Source: BP Review Oil consumption per capita

17. mbd Oil consumption if world populations consumed oil as Americans

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

19. Seaborne oil trade and tanker fleet Source: Fearnleys/IEA

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

21. Source: IEA Sources of Asian oil imports

22. mbd Source: IEA Sources of European oil imports - mbd

23. mbd Source: IEA Sources of US oil imports - mbd

24. Increase in world oil demand in ME*, USA, China and ROW** mbd Source: IEA FSU: +0.05 Other Asia: +0.18 L America: +0.09 Africa: +0.06

25. World oil supply - mbd Source: IEA mbd

26. Tanker Supply

27. Tanker contracting $ bn m dwt VLCC 13. 4 $ bn Suezmax: 5.9 ” Aframax: 8.8 ” Panamax: 2.8 ” Handy: 22.9 ” (43%) Source: INTERTANKO/Clarkson Shipyard Monitor

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

29. Phase out SH tankers above 30,000 dwt m dwt

30. 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

31. 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

32. Conversion to DH Total 7. 2 m dwt Built10-3030-5260-7290-113120-148VLCCsTotal 1970s3200005 1980-84836910054 1986-891112033130 1990-98291182234 Total2459102253123 Conversion to FPSO/FSO/bulk carriers, heavy lift …. (1.9 m dwt in 2006, 1.2 m dwt so far 2007

33. Tanker deliveries, removals, min phase-out m dwt

34. Tanker deliveries, removals, max phase-out m dwt

35. Tanker fleet double-hull development Source: INTERTANKO %

36. Oil import by Suezmaxes - share of double hull % Source : Fearnleys

37. Tanker deliveries, removals, max phase-out m dwt

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

39. Tankers 30,000 - 59,999 dwt min phase out, + 6 % trade increase, assume balanced marked end 2006 m dwt..if 4.5% increase, no new orders needed before 2012

40. VLCC fleet development Number Source: INTERTANKO m dwt

41. Aframaxes max phase out + 4.5% trade increase, assume balanced marked end 2006 m dwt Fleet: 72 m dwt Orderbook: 28 m dwt Single hull: 14 m dwt Average age: 9.2 years Surplus end 2007: 1.5 m dwt ” 2008: 5.5 m dwt ” 2009: 12.0 m dwt 15% ” 2010: 5.3 m dwt 6%

42. Aframaxes max phase out + 4.5% trade increase, assume balanced marked end 2006 m dwt Fleet: 72 m dwt Orderbook: 28 m dwt Single hull: 14 m dwt Average age: 9.2 years Surplus end 2007: 1.5 m dwt ” 2008: 5.5 m dwt ” 2009: 12.0 m dwt 15% ” 2010: 5.3 m dwt 6%

43. Tankers 30,000 - 59,999 dwt min phase out + 6 % trade increase, assume balanced marked end 2006Number end 2007, 145 del - 45 phase out*, 75 increase demand = surplus 25 ships “ 2008, 157 “ - 17 “ 80 “ = “ 85 “ “ 2009, 127 “ - 18 “ 84 “ = “ 110 “ “ 2010, 56 “ - 93 “ 90 “ = “ 1 “ 1,253 tankers 487 orders 228 phase out 11.1 years

44. Oil import by Panamaxes - share of double hull % Source : Fearnleys

45. Oil import by Suezmaxes - share of double hull % Source : Fearnleys