THE crude oil and product tanker sale and purchase market has seen reduced activity in 2024 compared to the previous two years, following increases in asset values across all vessel segments. 

“The tanker market has witnessed so far in 2024 the most subdued sale and purchase activity since 2020. The tanker market has witnessed a notable shift in recent months, characterised by a combination of rising vessel values and softening freight rates,” said Xclusiv Shipbrokers analyst Eirini Diamantara.

She told Lloyd’s List this dynamic has contributed to a slowdown in sale and purchase activity, with the confluence of high asset prices at a time of falling freight rates both creating a challenging environment for potential buyers.

“The increased cost of acquiring secondhand tankers, coupled with the uncertainty surrounding future market conditions, has discouraged many investors from making significant investments,” said Diamantara.

Since January, a total of 337 tanker sales of more than 10,000 dwt, were concluded. This is some 34% lower when compared to the same period in both 2023 and 2022.

Nevertheless, volumes so far in 2024 are around 40% higher than the corresponding period in 2020.

Recent notable deals include two suezmax units, the sale of which was reported by Belgium’s Euronav today.

They comprise the 2006-built Statia (IMO: 9302982) and the 2008-built Sapphira (IMO: 9336983). The 150,205 dwt pair have been acquired by private interests of Euronav's controlling Saverys family.

Meanwhile, brokers report the sale of the 2009-built very large crude carrier Advantage Virtue (IMO: 9379698). This 296,000 dwt ship is reported to have been sold to Chinese buyers for $51m.         

In the aframax segment, Pertamina is said to have acquired the five year old long range two tanker STI Lily (IMO: 9838242) from Scorpio Group for $73.5m.

Recent medium-range tanker sales included the SR Navigation-owned Caribbean Star (IMO: 9278698). This 20-year-old, 46,000 dwt vessel was sold to undisclosed buyers for $17.9m.

Diamantara noted that although five-year-old and 10-year-old tanker values remain at their highest levels in 16 years, values of 15-year-old ships and older have corrected recently. 

She said MR units have been the driving force behind sale and purchase activity in 2024, with such vessels accounting for some 33% of all sales so far. This is followed by the aframax/LR2 segment, with a total of 53 vessel sales.

“MR2s and LR2s have emerged as highly sought-after assets, due to increasing preference for clean trading options,” said Diamantara.

“These versatile vessels offer the flexibility to transport both clean and dirty cargoes, making them attractive to a wide range of shippers and traders.”

In the past four months, tanker values have witnessed a notable trend, with MR2s experiencing a significant uptick while prices for VLCCs, suezmax, and aframax units have remained relatively stable.

Since early June, the market for tankers of more than 80,000 dwt has seen a period of price stability.

However, a distinct divergence has emerged in the MR2 segment, said Diamantara who noted that five-year-old and 10-year-old MR2s have seen a marked increase in value, due to robust demand.

She said presently, five-year-old MR2s are valued at around $50m, representing a 10% increase compared to June 2024 levels. Within the same period, asset values of 10-year-old MR2s are up by 8%, to around $41m.

“The MR Atlantic Basket and MR Pacific Basket experienced a period of robust freight rates from January 2024 to mid-July 2024, propelling the values of MRs to 16-year highs.

“While both baskets have subsequently retreated to year-to-date lows, the long-term outlook for the MR market remains positive, mainly as we approach the winter season.”

Diamantara noted that despite the 34% decline in sale and purchase activity in 2024, the demand for modern, fuel-efficient vessels has seen a significant increase. 

Since January, some 60 tankers of up to 10 years old have been sold, compared to only 31 sales of such vessels between January and September 2023.

There has also been an increase in demand for scrubber-fitted tankers this year when compared to the same time period of 2023.

From the beginning of this year, more than 30% of all tanker sales were of vessels fitted with exhaust gas abatement systems, compared to 18% in the first nine months of 2023.   

Diamantara said ships equipped with scrubbers, or fitted with electronic main engines, will command a price premium compared to more basic vessels without such characteristics.

Furthermore, vessels engaged solely in clean trades or ships featuring the latest hull coatings and energy-saving devices will also be able to obtain higher prices.

“Premium pricing for higher specification vessels is not easy to quantify and to put a price tag next to it," said Diamantara.

“A ship’s value is influenced by several factors, such as the prevailing market conditions at the time of purchase, vessel age and trading patterns."