(EnergyAsia, February 26 2013, Tuesday) — The global oil tanker market could begin a slow recovery next year as the current glut eases up, predicts UK-based Drewry Maritime Research.

For 2013, the shipping intelligence firm said the industry faces “another tough year” as tanker owners continue to struggle under the pressure of overcapacity. A predicted 2.6% rise in tanker tonnage to 330 million dwt in 2013 will partly be offset by the delivery of 26.4 million dwt in new tonnage.

Tonnage demand edged up 0.6% to 325 million dwt in the fourth quarter but supply expanded by 4.3 million dwt to exceed 412 million dwt, said Drewry.

The market has been weighed down by a “persistent weakness” in freight rates together with high bunker prices, limited availability of credit and very low earnings.

With such a poor outlook on earnings, Drewry said owners are reluctant to take deliveries resulting in delivery slippage hitting a high of 38% in 2012. Even the strategy of yards to attract owners by offering vessel designs with improved efficiency in the scenario of rising fuel cost does not seem to be working at this stage.

“Capacity expansion in the dirty tanker segment was faster than for clean tankers, at 3.4% compared with 2.5%. In both categories, almost all the additions took place in larger vessels segments such as VLCC, Suezmax and LR2,” it said.

“The fleet of smaller vessels shrank, suggesting that owners are being attracted to the economies of scale offered by larger vessels. Deliveries continue to outpace strong demolitions, which reached their second highest level for five years with over 11 million dwt demolished.”

Global oil consumption only managed a timid growth in the fourth quarter of 2012, with global crude oil loadings increasing by 0.6%.

OECD consumption shrank by 1.0%, despite US Gulf Coast refiners increasing imports of heavy crude from the Middle East Gulf by 2%. This contrasted with a 2.7% increase in non-OECD countries as weak US demand for light crude forced West African producers to export to eastern markets.

Drewry said the orderbook has now shrunk to a mere 12% of the existing fleet, which suggests that the pace of supply growth will lose some steam after 2013.

With less than 13 million dwt of tanker tonnage ordered in 2012, Drewry expects the tanker fleet to grow at relatively slower pace of about 3% CAGR during 2013-17, to 487 million dwt. This is down from 14.9 million dwt and 36 million dwt in 2011 and 2010 respectively.

The company expects a “good recovery” in tonnage demand from 2014 as a result of an improving global economy and rising oil demand driven by Asia, the Middle East and Latin America.

For the period from 2013 to 2017, it expects tanker demand to rise steadily by about 5% a year to reach 405 million dwt.