John Fredriksen’s Frontline is not about to order any big tankers any time soon.
Chief executive Lars Barstad told a conference call with analysts that yard prices are too high for time charter rates to justify the investment.
“It just doesn’t look very interesting to Frontline,” he said.
Barstad noted that some of the orders being placed for crude tankers are against long-term charters.
He told the call that Frontline’s proposition to shareholders is to offer spot market exposure, so the owner will not be going down this route.
And he said other orders placed recently appear “somewhat opportunistic”.
“You pay a 20% or 25% down payment on a call option for a market that could be quite interesting in 2026,” he added.
“We are not in that business either. We look at it, we observe it, but we’re not there to press the button.”
Barstad believes it is “quite incredible” that by the end of this year, 111 VLCCs above 20 years of age will still operating in the market .
This is 12.6% of the current fleet, compared with an orderbook of just 16 vessels.
“It is very, very difficult to see a scenario on the supply side that will rock the tanker story until at least well into 2026,” Barstad said.
He told the call that there are market rumours of two more VLCCs being ordered, with some other deals under discussion, but did not go into details.
And he said using some of the newly reactivated Chinese shipyards is a risky exercise for shipowners.
None of these could offer 2025 dates, he added, because it will take time to get up and running.
