The tanker fleet has grown over the past twelve months by another 203 units amounting to 21.9 million dwt, says Gibson's Mid-Year Review of Weekly Tanker Market Report.
This follows a period of very limited fleet growth (across all but the MR sector) following a period of reasonable demolition activity at firmer lightweight prices prior to 2015.
Of course the strength of the tanker market during the low oil price regime has meant that owners have had little need to even think about scrapping as bunker prices headed south improving their margins still further.
Eco-ships no longer held any significant advantage as legislation on environmental issues continued to keep its distance resulting in demolition numbers falling to a mere 34 tankers (2.5 million dwt) over the past twelve months.
Of the 366 tanker orders placed last year, 218 were contracted in the 2nd half of the year, although many were placed to circumvent the higher costs associated with the new Tier III regulations which came into force 1st January in the US.
Newbuilding prices themselves had been slowly falling since June 2014 but had a small resurgence over the 4th quarter 2015. However, the appetite for new orders across all the tanker sectors has evaporated this year despite renewed falls in pricing and the mounting pressure on shipbuilders to fill their forward orderbook.
Finance too appears to have ended its love affair with the shipping industry, mostly driven by the disastrous state of affairs in the dry cargo market, but also the high tanker orderbook and the spate of deliveries scheduled for 2016/17.
In the 1st half of this year 14 million tonnes dwt has already been delivered compared to the 17 million in the whole of 2015. Despite the strong earnings across most tanker sectors over the past two years, second-hand values have also come under downwards pressure since the turn of this year as freight rates began to decline.
Looking at the political scene, this time last year we were talking about the return of Iran to the tanker market and in particular more crude being available for shipment.
Despite the lifting of sanctions in January, Iran continues to find it difficult to get significant traction into the market, but it will only be a matter of time as the difficulties associated with trading with the nation subside. Iraqi production continues to rise, however there is a feeling that this may have peaked.
So much has happened over the past twelve months which is difficult to précis into a single page. What is clear is that the 2nd half of the year will remain challenging particularly with such a heavy delivery profile scheduled.
Earnings across most sectors started the year quite strongly although crude began to slump recently, while the products sector has experienced a tough six months.
Of course the health of the tanker market remains very much in the hands of the producers and the decisions that they make regarding future production, However, we still need to keep a watchful eye on the orderbook and hope that new orders remain in check.