The Impact of Ghost Tonnage on DPP Tanker Supply
Sept. 9, 2022
One major complexity regarding statistical analysis of deletions is the fact that we must account for the overall behavior of conventional tanker owners, but also external factors such as ghost ships and other sanctioned vessels. Our updated methodology measuring the impact of “ghost ships” and sanctioned tonnage emerged from the initial observation of the large number of vintage DPP tankers (mainly VLCCs) that were sold for premiums in the secondhand market. These vessels continued trading utilizing techniques such as turning off their AIS transponders or engaging in open sea STS operations, raising the question of how these units should be considered as part of the vessel supply variable.
Despite the inefficiencies around the utilization of “ghost” tonnage, the reality is that they are transporting cargos that would under different circumstances be transported by conventional ships. Using a derived-demand approach, we concluded that the inefficiency ratio for “ghost” tonnage is approximately 30% (a more detailed analysis of our methodology is presented in the August Mid-Year Update report). In the case of sanctioned vessels, the process is much more straightforward given we do not have the ability to forecast sanctions or their removal. For this reason, we assess the impact of this type of tonnage up to the current year with the information that is available and still at 70% efficiency.
Our records indicate that 68 VLCCs were effectively removed in 2021 from our baseline supply considerations, 28 Suezmaxes and at least 14 Aframaxes (Figure 1). Going forward, we project a decline in vessels entering the “ghost” fleet, although, our calculations of the impact from Russian sanctions suggests several more crude tankers are likely to enter this fleet.
Share
Comments
You need to login to comment.
