Tanker owners stay bullish but warn rates can't only rise

The average tanker is now 13.5 years old, against a historical norm of 10.3 years, and roughly 19% of VLCCs have passed their 20th birthday — yet owners at this week's Maritime CEO Forum in Monaco remain broadly bullish on freight, even as they flagged the warning signs that could end the boom.

Speaking at the Yacht Club de Monaco on Tuesday, executives from Alberta Shipmanagement, Foreguard Shipping, International Andromeda Shipping and the Bruton-Himalaya-OMC group debated elevated asset prices, ageing tonnage and mounting geopolitical risk.

What could end the boom?

Alexia Inglessis, director at Alberta Shipmanagement, named two threats: a major Middle East escalation destroying oil infrastructure, or a financial shock comparable in impact to the 2008 crash. She stayed optimistic regardless, citing recovering Middle Eastern oil flows, stronger Chinese demand, depleted inventories and the continuing inefficiencies created by sanctions and geopolitical disruption.

"I think we have a lot of things that point to a good market for the short to medium term," she told delegates at the by-invitation-only gathering.

Alan Hatton, chief executive of Foreguard Shipping, told owners to watch the behaviour of major oil companies and commodity traders. Several have recently taken ships on period charter; any move to relet that tonnage would signal that those closest to physical oil markets expect weaker conditions.

Lars-Christian Svensen, who heads Bruton, Himalaya Shipping and OMC Tankers, agreed that fading appetite for 12-month and three-year charters would matter. He stressed his companies remain bullish across the tanker cycle.

Where is the money?

The numbers back his confidence. Bruton's merger with International Seaways gives investors continued market exposure, and OMC holds eight VLCC newbuildings scheduled for delivery in 2028 and 2029. Early Bruton investors have achieved a fivefold return through the merger, Svensen revealed.

Not everyone is chasing the upside. Giangiacomo Serena di Lapigio, chief executive of International Andromeda Shipping, warned the biggest mistake would be assuming rates could only rise. His company favours long-term time charters, locking in earnings security with potential profit-sharing arrangements.

Hatton cautioned against a "one-way directional bet" on continued strength — particularly when ordering expensive newbuildings for delivery in 2030 or 2031.

What about the old fleet?

The panel dug into the industry's greying tonnage. Inglessis noted demolition age has climbed from 23 to 25.5 years, and the overwhelming majority of VLCCs over 20 years old now trade in the shadow fleet. Age alone shouldn't determine a vessel's acceptability, she argued; maintenance and operational standards count just as much.

On Middle Eastern oil producers accumulating their own tankers, Svensen suggested removing vessels from the independent market could actually support freight rates near term.

Hatton was cooler on chemical tankers matching crude carriers' spectacular gains, pointing to the economics of industrial cargo movements and increasingly challenging newbuilding costs.

Which ship would they buy?

The session closed with a pointed question: which tanker would each panellist buy with their own money today?

• Hatton: a 10- to 15-year-old eco LR2
• Svensen: a 15-year-old VLCC
• Serena di Lapigio: a South Korean-built chemical tanker with long-term charter cover
• Inglessis: nothing — stay on the sidelines

That split captures the dilemma facing tanker investors: extraordinary immediate returns set against increasingly expensive long-term commitments. With tonnage lists ageing, newbuild slots booked to 2029 and beyond, and charter desks still paying up for period business, the market's next signal may come from whoever relets first.