The million-barrel tanker is in danger of being squeezed out of the crude oil transport market through a combination of bigger competitors and tightening pollution regulations.
This is the view of Drewry Shipping Consultants Ltd., London, which sees future crude oil trade dominated by very large crude carriers (VLCCs) and comparatively small Aframax class tankers.
VLCCs are larger than 200,000 dwt, while Aframax tankers are defined as vessels of 60,000-100,000 dwt. John Harris, senior consultant at Drewry, explained that a Suezmax tanker is typically 140,000-150,000 dwt.
"The Suezmax class was developed as the largest fully laden tanker that can pass through the Suez Canal," said Harris. "You can take a VLCC through the canal, but not fully laden."
Yet Harris said the Suezmax class, also commonly known as the million-barrel tanker because of its typical capacity, is going out of fashion except for dedicated trades.
Trade decline
"Chevron Corp. has a number of Suezmax tankers for deliveries to U.S. West Coast ports," said Harris, "and Ultramar Corp. has some for deliveries to the Canadian East Coast. British Petroleum Co. plc also has some for North American trades; otherwise the majors operate few if any of them."
In a new report, Drewry said the biggest challenge facing the Suezmax fleet is continuing competition from VLCCs. Giant tankers are eating into traditional Suezmax trades, particularly West Africa to North America.
The consultant said a deteriorating trading environment is not new to owners of the Suezmax fleet: "Originally designed as a servant of the Middle East, it failed to gain a significant market.
"The Suezmax tanker has neither the trading flexibility of an Aframax nor the economies of scale of the VLCC, yet it is subject to compliance with OPA90 for much of its trade".
Sales trend
While large independent tanker owners and oil majors have been selling their Suezmax vessels, Drewry reveals that Greek companies in particular have snapped them up after prices softened in the early 1990s.
Greek independents bought 46% of Suezmax tankers sold during 1990-95, said Drewry, mainly buying vessels 16-20 years old.
"A closer examination of some acquisitions shows that many of these aging vessels have only just passed special survey," said Drewry, "leaving them well-placed to take advantage of any improvement in the market."
Older Suezmax tankers have been used for oil production and storage projects, particularly in the Far East, and storage contracts are said to represent an attractive option to scrapping for owners.
As to why Greek independents should be so keen to buy an otherwise outmoded vessel type, Harris said tankers used in Mediterranean and Black Sea regional trades are typically older than those used elsewhere.
"In the short term, Mediterranean oil traders are not too fussy about chartering aging Greek ships," said Harris. "The kind of tonnage often used in the Mediterranean is not premium."
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