Tanker supply fundamentals are impacted by new orders, new deliveries and demolition of ships that are no longer viable to operate.
•New orders are placed by shipowners anticipating future rates to exceed a break-even level that is determined by the purchase price of the ship as well as the projected cost to operate it.
•New deliveries take place 2-3 years after a ship is ordered.
•Demolition of crude tanker is typical after the ship reaches 20-25 years of age, at which point ships are not economical to operate due to the cost maintenance (a full inspection completed every 5 years) to meet environmental and technical requirements.
