DHT Holdings chief executive Svein Moxnes Harfjeld says large oil companies may have to embark on partnerships with shipowners and longer-term charters to confront underinvestment in the sector.

Asked about pitfalls ahead for tankers at the TradeWinds Shipowners Forum Oslo during Nor-Shipping, the executive ruled out volatility as a problem, according to a recently released recording of the event. After all, large tankers have always been volatile, he said.

And the key to that is having a shipowning company with a robust capital structure, said Harfjeld, whose New York-listed company is an owner of VLCCs.

“Our industry needs less leverage than what it has had over quite a long time, so more risk capital will be involved,” he said.

The executive said a lack of appetite to invest in the sector has fuelled underinvestment in tankers.

“When you talk to the large integrated oil companies, they are concerned with this underinvestment, and they need to figure out how to stimulate investment,” he said.

“They need, I think, to go back to older times when they engaged in partnerships with shipowners, longer-term charters to stimulate investments and more employment.”

In that scenario, the market will still have volatility, Harfjeld said.

But a greater focus on long-term chartering would represent a shift from the spot fixture-driven tanker market of today.

“I think we will have a very interesting [and] a bit different time ahead of us than what we have experienced, especially in the last 20 to 25 years,” he said.

Click here to access the full recording of the forum.

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