Frontline Ltd., the world"s biggest supertanker company, said owners of single-hulled vessels are more likely to scrap their ships after the Port of Fujairah said it would ban them next year.
Frontline Ltd., the world"s biggest supertanker company, said owners of single-hulled vessels are more likely to scrap their ships after the Port of Fujairah said it would ban them next year. Fujairah, in the United Arab Emirates, is the most common regional refueling point for ships carrying crude from the Persian Gulf. About 90 supertankers, or 17 percent of the global fleet, have single hulls. ?It"s another nail in the coffin for single-hull ships,? Jens Martin Jensen, Singapore-based chief executive officer of Frontline"s management unit, said by phone today. Fujairah"s ban is ?a push in the right direction? that may contribute to the fleet shrinking next year, he said.
The International Maritime Organization, a United Nations agency with 169 members, will implement a global ban on single- hull tankers from next year. Nations can opt out until 2015. The European Union called the ship design ?more accident-prone? in 2003 and London-based BP Plc says it won"t hire them because of the risk of leaking, favoring double-hulled ships instead.
Frontline operated a fleet of 84 tankers including seven single-hull carriers according to its quarterly earnings report on Aug. 28. The majority of its single-hulled ships are leased out on fixed fees until the end of next year.
Shipping costs on the industry-benchmark Saudi Arabia to Japan shipping route climbed 5.4 percent to 46.39 Worldscale points yesterday, according to the London-based Baltic Exchange. Daily returns from the voyage rose 16 percent to $21,584.
The number of in-service vessels grew 5 percent to 524 carriers this year, according to Lloyd"s Register-Fairplay. By contrast, global seaborne trade in crude oil declined 4.9 percent to 36.4 million barrels a day, ICAP Shipping International Ltd. said in a report Nov. 11.
?We believe single-hull ships will be gradually phased out within 2010,? Rikard Vabo and Lars Erich Nilsen, analysts at Oslo-based investment bank Fearnley Fonds A/S, said in a report today. There are other refueling and servicing ports available within the Middle East, the analysts said.