Leave the tanker orderbook to the private owners, Pareto Securities head of research Eirik Haavaldsen advised presenters at the firm’s Energy Conference on Thursday.
With the tanker market widely expected to be at the start of a major, multi-year upcycle, Haavaldsen encouraged the Oslo- and New York-listed tanker owners set to pitch investors following his address to spend on dividends to prolong the sector’s strength.
“Do not take meetings with Asian shipyards,” he joked. “That goes for the whole public shipping sector.”
Haavaldsen said there will be a lack of investment in shipping in the coming years, requiring $50bn in investment just to keep the global tanker fleet from shrinking.
For VLCCs, he estimated no growth in the VLCC fleet until 2033.
That spending does not figure to come from public owners, who Pareto forecasts to be spending just $100m on fleet investments in each of 2024 and 2025.
What they are spending money on, Haavaldsen said, was dividends with the total sum returned to shareholders expected to hit $2.1bn by the end of the year before rising to $2.5bn in 2024 and $2.6bn in 2025.
He said investors like the low ordering activity, which is one part of a multi-pronged case for prolonged tanker market strength that includes longer trading patterns prompted by Russia’s invasion of Ukraine and greater oil demand.
Haavaldsen said there will be orders eventually and that the market will need them.
And while he cautioned listed owners to stay away, he said even the privately-held owners he favours placing orders might not be enough to derail the market.
“We don’t think there will be enough private Greeks. They’ve already ordered,” he said. “We don’t think there will be enough Norwegian Vikings to derail and destroy this market.”
