[22]1 Crude Oil Transport by Ships: Present Situation as Regards Volume, Age Distribution, Routes, Economics, Ownership, etc.

[22]1 Crude Oil Transport by Ships: Present Situation as Regards Volume, Age Distribution, Routes, Economics, Ownership, etc.

The majority of the world's crude oil is transported in tanker vessels, currently estimated to be 1300 million tonnes annually rising to approximately 1450 million tonnes by the turn of the century. Transportation of crude oil by sea has increased spectacularly since the end of the second world war.The period of very cheap crude oil in the 50s and 60s encouraged demand to such an extent that vast new fleets of crude oil carriers were constructed, culminating in ships of excess of 550000 ton DWT being built, and vessels of 1 million tons were considered.Building and chartering of both ULCCs and VLCCs reached a climax and came to an abrupt halt in the second half of the 70s when the combination of nationalization and increased crude oil prices considerably reduced demand.The tanker market is still suffering from the effects of this over-building. The major route for crude oil carriers remains from the Middle East Gulf to the U.S.A., Europe and the Far East. Freight rates remain low, in spite of scrapping, the influx of new buildings has swollen the fleet to where it is again surplus to requirements, with earnings remaining insufficient to make the investment worthwhile.This paper, reviewing the current situation in the worldwide market for the transportation of oil by sea, addresses a number of areas of considerable concern within the shipping industry. It is, I believe, equally important that the discussion of these issues is conducted in the widest forum possible. It is, therefore, significant that the question of the future supply of a tanker fleet that is capable of carrying nearly half the oil consumed in an efïicient, economic and environmentally-safe manner, is included within the World Petroleum Congress' agenda. The provision of, and the maintenance of such a fleet, is justifiably among the challenges and opportunities within the context of ‘Petroleum in a World of Sustainable Growth’.Shipping is an industry which is noted for extremes

conspicuous wealth followed by financial ruin is as much a feature as calm weather following atrocious storms. Shipowners and seafarers have used their skills for centuries to avoid the potential disasters that have confronted them. This paper reviews the factors that have contributed to a situation where today's tanker industry is in need of a systematic injection of investment for the renewal of a large proportion of the fleet, and that the return of the investment, dictated by the freight rates, should be comparable with other industries, not least the oil industry itself. The consequence of ignoring the current fundamental challenges facing the tanker industry is the risk not only of

1994-05-29

Shawyer, E. F.

conferencePaper

IQM8392U