The number of very large crude carriers (VLCCs) ordered in April was the highest level seen since last August, investment bank UBS says in a recent report.
But analyst Spiro Dounis says some of the orders remain contingent and may not come to fruition.
As reported in TradeWinds, April saw three VLCC orders from John Angelicoussis' Maran Tankers go to DSME. Hyundai Samho Heavy Industries took in two orders from Singapore's Sentek Marine and Neda Maritime signed up for one firm order.
May is also starting off on a strong note with BW Group confirming that it has placed orders for four VLCCs at Samsung Heavy.
Dounis says the 18 total orders since the beginning of the year represent about 50% of demand growth in the world crude oil market, an amount that is "quite significant."
"Tanker orders went from virtually nothing to suddenly something," Dounis said. But "there are some reasons to not throw in the towel just yet."
Dounis notes that some of the orders may yet not be completed, and some are not yet attached to charters. Likewise, some of the orders have yet to get refund guarantees, and without a refund guarantee "we'd expect to see orders cancelled."
Shipyards are also apparently offering aggressive pricing in order to drum up business. But with berth space filling up, "these tactics have a shelf life and may not be replicable in the next few quarters," the analyst said.
