Tanker scrapping remains down in 2023, despite Petrobras recycling two LR1 ships that were never actually launched.
French shipbroker BRS Group said the past 18 months have seen tanker demolitions dry up.
So far this year, only seven vessels of 34,000 dwt have been removed from the fleet, a total of 365,000 dwt.
Another eight units totalling 600,000 dwt are assessed as having been sold for scrap, but have not yet beached, the Paris shop said.
This is “significantly” fewer ships than in the dry bulk and container ship sectors, where 56 and 48 vessels have gone to breakers in 2023, respectively.
This reflects higher tanker earnings, but also demand for vessels to service Russian oil trades and a low orderbook, BRS noted.
The figures have been boosted by the scrapping of two Brazilian LR1s, which were ordered by Petrobras at the start of the last decade.
“Following significant construction delays, these units then fell foul of local content and financing issues, which saw them scrapped in Brazil earlier this year without ever having been launched,” the broker said.
BRS told TradeWinds the vessels were the 72,000-dwt Irma Dulce and 72,900-dwt Zelia Gattai.
They cost around $87m each to order.
The tankers were contracted at domestic shipyard Estaleiro Ilha (EISA) and were due in 2013 and 2014.
EISA filed for bankruptcy in 2015 and the hulls lingered at the fitting-out quay for almost a decade.
Scrapping reportedly took place on the other side of the bay from where they were constructed.
BRS said the appetite for Russian-trading tonnage has fallen but remains a factor.
Almost 200 tankers of 34,000 dwt or above have moved to the “grey fleet” of uncertain ownership since the start of the year.
Today, a 15-year-old aframax is worth $40m for further trading, while its scrap value is around $9m.
No new boom in vintage sales
“There is an argument to suggest that as mainstream tankers have recently pulled back from lifting Russian crude, there is now more demand for grey-fleet tonnage. However, we do not anticipate that this will lead to another boom in vintage tonnage sales,” BRS added.
The broker forecast at the start of 2023 that 39 tankers would be demolished.
The company has now reduced this down to 16 ships.
“Although we currently see little concrete appetite from governments to regulate the grey fleet, we believe that this could swiftly change in the event of a serious oil spill,” BRS argued.
“Such an event could see receivers, even in China, India and Turkey, ban some vintage tankers from their waters if they cannot produce adequate certification and insurance,” the company added.
This would likely see many vintage tankers lose their business overnight, hastening their voyage to breakers yards, with scrapping soaring above BRS’ current forecast as a result, the broker admitted.
