Industry Note No. 14 - Tanker Supply: A Gift and a Curse

Tanker demand is an essential component in the performance of the tanker industry, dictating trade volumes and tanker routes. The supply side of the equation is equally important as the volatility of fleet growth may have a pronounced impact on freight rates. Our historical ton-mile data for crude/dirty petroleum product tankers (DPP) and clean petroleum product tankers (CPP) shows relatively steady annual demand growth of 1-3% on average, allowing for the ebbs and flows of supply fundamentals to influence the direction of the market. In this note, we will discuss our tanker supply expectations and potential impact on freight rates over the period 2017-2020.