With demand to replace aging ships overlapping with the U.S.-Iran war, orders for crude oil carriers (tankers) have surged this year, and more than three-quarters of those orders have gone to China.
On the 15th, according to Clarksons Research, a British shipbuilding and shipping market analysis firm, a total of 91 crude oil carriers have been ordered worldwide so far this year. Considering that a total of five ships (three in Korea and two in China) were ordered in the same period last year, the increase is significant. About two-thirds of last year's total annual orders (143 ships) were placed in roughly the past two months this year.
Orders for crude oil carriers appear to have jumped due to demand to replace aging ships. Crude oil carriers are classified as aging vessels when they are between 15 and 20 years old, generating replacement demand. Crude oil carriers ordered during the global shipbuilding boom from 2003 to 2008 reached their replacement window starting late last year. As environmental regulations for ships by the International Maritime Organization (IMO) and others tighten, more shipowners are moving up their order schedules in response.
The order trend for crude oil carriers is expected to steepen further amid fallout such as the closure of the Strait of Hormuz due to the U.S.-Israel war. With 20% of the world's crude oil trade passing through the Strait of Hormuz now blocked, crude oil carriers will have to reroute around the Cape of Good Hope in Africa for the time being. The longer transport distances are expected to require more crude oil carriers for shipowners.
Recently, orders for crude oil carriers have concentrated in China. Of the 91 crude oil carriers ordered this year, China took 69, or 75%. Korea won the remaining 22.
The domestic shipbuilding industry, led by the "big three" — HD Korea Shipbuilding & Offshore Engineering, Hanwha Ocean, and Samsung Heavy Industries — is focusing on winning orders for high value-added vessels such as liquefied natural gas (LNG) carriers, very large crude carriers (VLCCs), and ultra-large container ships. In orders for Suezmax and Aframax crude oil carriers, which are mid-size and small, Korea is losing ground to China.