- MR and LR2 Segments Dominate 2025 Deliveries.
- Alternative Fuel-Ready Ships Make Up Small Share of New Deliveries.
- Low Recycling Activity Impacts Fleet Decarbonisation.
Product tanker newbuild deliveries are expected to experience a significant surge in 2025, reaching 12 million deadweight tonnes (DWT), a 256% increase compared to the 3.4 million DWT delivered in 2024. This marks the highest delivery volume in 16 years and the second-largest on record, reports Marine Link.
Product Tanker Newbuild Deliveries to Surge in 2025
“According to current delivery schedules, product tanker newbuild deliveries are set to reach 12m deadweight tonnes (DWT) in 2025. Deliveries will therefore jump 256% compared to the 3.4m DWT delivered in 2024. At the same time, deliveries will reach a 16-year high and the second highest on record,” says Niels Rasmussen, Chief Shipping Analyst at BIMCO.
Increased Ship Contracting Drives Delivery Spike
The delivery spike follows a contracting spike of new ships in 2023 and 2024. In those years, 551 new ships were contracted with a capacity of 38.7m DWT, significantly up from the yearly average of 122 ships (7.3m DWT) recorded over the previous 10 years.
Rising Order Book and Fleet Expansion
“The spike in contracting has increased the order book from 10.6m DWT at the beginning of 2023 to 41.2m DWT at the start of 2025. During the same period, the order book to fleet ratio rose from 6% to 22%,” says Rasmussen.
MR and LR2 Segments Lead in Orders and Deliveries
During the last two years, the MR segment attracted the most orders with 278 ships contracted while the LR2 segment saw the most capacity ordered with 19.2m DWT. The two segments also dominate deliveries for 2025 with 98 MRs and 52 LR2s (4.9m and 6.0m DWT respectively) scheduled. Compared to the fleet size at the start of 2025, the scheduled deliveries will add 2%, 6%, 3% and 12% to the DWT capacity of the Handysize, MR, LR1 and LR2 fleet.
Alternative Fuel-Ready Ships Make Up a Small Share of 2025 Deliveries
Nearly 75% of the ships due for delivery in 2025 were ordered over the last two years. However, only 7% will be able to operate on alternative fuels while another 12% are being prepared for a future retrofit. In the balance of the order book, the percentage of ships that will be able to use alternative fuels is 11%.
Low Recycling Activity Threatens Fleet Decarbonisation
In the past five years, recycling activity has been sluggish, and the average age of a ship has risen by more than 2.5 years since the start of 2020. Continued low recycling activity would lengthen the lives of older tankers but slow the renewal and decarbonisation of the fleet.
Older Ships Creating Capacity Overhang
“The low recycling activity during the past five years has created an overhang of older ships. Currently, 10% of the fleet’s capacity is comprised of ships older than 20 years. A return to normal recycling patterns would significantly increase recycling but continued Russian sanctions and Houthi attacks in the Red Sea could further delay the retirement of the oldest ships. We estimate that fleet growth will be 5-6% in 2025 while a decline in oil demand growth will likely result in product tanker demand growth ending lower,” says Rasmussen.
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Source: Marine Link
