So far, an estimated 341 tanker construction orders have either been scrapped or are very much unlikely to materialise in such a situation.
The global credit tightness could force shipyards and tanker owners worldwide to cancel 341 vessel orders and this would have a serious impact on transport of hydrocarbons and other commodities, according to an official report. Besides lack of financing, a sharp fall in oil demand because of the crisis has already hit shipping activity, mainly between major oil producing regions and consumer countries, said the report by the Organisation of Arab Petroleum Exporting Countries (Oapec), which groups 10 Arab crude producers.
Oapec, sitting atop nearly 60 per cent of the world's proven oil wealth, estimated the present value of orders for tankers at nearly $345 billion (Dh1.2 trillion), adding that 30 per cent of such orders have already secured funding.
"Banks and shipyards worldwide are not expected to finance the rest of these orders? it is worth noting that the portfolio of the biggest 10 banks specialised in shipping funding totalled $240bn in May 2008 while the rest of the capital of 15 banks is estimated at $107bn. These banks could hardly meet tanker investments when they were in a position to provide funds before the crisis," Oapec said in a study on the prospects of the oil tanker market.
"So far, an estimated 341 tanker construction orders have either been scrapped or are very much unlikely to materialise in such a situation? the question now is whether fleet owners are able to fill the gap? we believe many shipyards around the world will not be able to complete their orders."
The report said investment in oil tankers swelled to a record high of $240bn in 2007 before plunging to nearly $107bn in the first eight months of 2008, just before the global crisis erupted in mid-September.
It noted that despite a decline of nearly 35 per cent in investments the first eight months of 2008 compared to the same period of 2007, they remained far higher than those in the previous years. "Both the shipyards and the fleet owners face the same problem this year, which is a severe funding shortage? banks appear unwilling to finance new contracts at a time when major shipyards are reeling under accumulating orders," said Oapec, which also controls nearly 40 per cent of the world's gas deposits.
"If they manage to control this new tanker investment cycle, then the global tanker fleet is expected to grow by a third during 2007-2010."
The study noted that despite the crisis, many LNG tankers have entered the market mainly because of a surge in gas exports and the fact that Qatar, the world's largest LNG exporter, managed to secure funding for its tankers. It said about 302 LNG tankers are now in service worldwide and there are orders for 84 new tankers, including for Qatar.
In the first eight months of last year, 30 new LNG tankers entered service while 31 were expected to have been delivered before the end of 2008. New deliveries also include 45 tankers during 2009 and 21 in 2010.
"In general, the global tanker market has declined over the past few months and is expected to remain under the pressure of slackening crude demand and funding shortages.
"These are serious threats to the world shipping activity. It is remain to be seen what turn the tanker market will take in the coming year in case demand remains weak and the fund problem is not tackled."