Category Tanker Transportation

CURRENT OIL MOVEMENTS AND TANKER DEMAND TRENDS

International Energy Agency statistics show that total primary energy supply through crude oil increased from 2880 million tons of energy in 1973 to 3700 million tons of energy in 2000. Table I shows the major producers of crude oil and petroleum products in 2001, and Table II shows the major exporters and importers for the year 2000. A recent study by Glen and Martin estimated that 59% of world oil produced in 2000 was traded by sea, a significant increase from the prior levels of 48% in 1990 and 56% in 1995. However, estimating demand for tanker transportation based purely on the volumes traded would be inaccurate unless the distances involved were also included...

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The Uncertain Years

The Yom Kippur War of 1973 put a dramatic end to the phenomenal growth that oil and tanker markets experienced during the previous two decades. This, along with the Arab embargo of oil shipments to the United States and The Netherlands and the increas­ing dependence of the United States on oil imports, led to the first oil price shock during which the OPEC nations raised the price of a barrel of oil fivefold on an average to $10/barrel. Furthermore, the Arab nations expropriated American and European oil investments in their countries. However, all of these were merely temporary setbacks, and the global demand for oil increased again once the embargoes were lifted...

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The Golden Years

The 1960s was a period of spectacular growth in the oil industry in general, and the tanker market in particular, due to its derived nature. The rapidly growing U. S., Western European, and Japanese economies consumed large quantities of crude and refined oils, and the United States, an oil exporter during earlier years, became dependent on foreign oil by the mid-1960s. Correspondingly, oil tankers began to increase in both number and size. The ship size limitation of 65,000 deadweight (DWT) im­posed by the dimensions of the Suez Canal was no longer relevant, with the bigger vessel sizes benefiting from their economies of size and contributing toward lower unit cost of oil transportation...

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BRIEF HISTORY OF OIL TRADING AND TANKER TRANSPORTATION

1.1 The Early Years

Oil trading began during the late 19th century, with the United States being the leading source and the U. S.-based Standard Oil being the most dominant player, exporting refined oil to Europe using its fleet of purpose-built small ships. The Nobel brothers, sons of Alfred Nobel (the inventor of dynamite), built up a competing European fleet during the mid- 1880s to trade oil from Russia that flourished until the Bolshevik revolution. Crude oil trading was not considered a feasible option during those years due to the relatively low value of the commodity. During the post-World War I era, short-haul crude oil trade originated, with most movements being to the United States from the nearby Latin American sources of Mexico and Venezuela...

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Tanker Transportation

SHASHI N. KUMAR

Maine Maritime Academy Castine, Maine, United States

1. Brief History of Oil Trading and Tanker Transportation

2. Current Oil Movements and Tanker Demand Trends

3. Tanker Nomenclature and Fleet Statistics

4. The Economics of Tanker Markets

5. The Regulatory Environment

6. Recent Developments and Outlook for the Future

Glossary

charterer An individual or entity, such as an oil company, that contracts the services of a ship under different chartering arrangements.

charterparty The chartering agreement or contract be­tween a ship owner and the charterer.

deadweight (DWT) A rough measure of the cargo-carrying capacity of an oil tanker.

Panamax The largest size ship that can safely transit the Panama Canal given the limitations of the Panama Canal locks.

spot charter A ship con...

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