Industry reports indicate that with new Very Large Crude Carrier (VLCC) orders not delivering until 2029, the global oil trade this decade will rely largely on the existing fleet. A 15-year-old VLCC available for prompt delivery is valued at around $140 million, notably above the roughly $130 million contract price for a newbuilding ordered today for 2029 delivery, a gap that is shifting owners' views on upgrading older tonnage.
What Happened
John Cooper, CEO of UK marine technology firm BAR Technologies, said publicly that the market's $140 million price tag on a 15-year-old tanker undermines the traditional argument that it is not worth spending money on a ship near the end of its life. According to shipbroker data cited by Cooper, a VLCC available for prompt delivery is worth about $235 million, compared with about $130 million for a newbuilding ordered today for 2029 delivery.
Cooper expects some tankers that might otherwise have headed for recycling within a few years to keep trading into the 2030s. BAR modelled a VLCC on a typical US-to-Japan trade: a five-unit installation of 37.5-metre wing sails, at 80% utilisation, would save around 2,670 tonnes of fuel a year, worth about $2.27 million in fuel costs at $850 per tonne of VLSFO, with a payback of about four years based on fuel savings alone.
The technology is already in use on existing ships. Bulk carriers Pyxis Ocean and Berge Olympus have been retrofitted with wing sails, and DNV independently recorded up to a 32% cut in main engine energy use on Pyxis Ocean in favourable conditions. One owner has taken delivery of three LR2 tankers equipped with wing sails, with two more due in 2027.
Background
Long orderbook lead times mean the existing tanker fleet will carry most of the world's seaborne crude this decade. At the same time, tightening energy-efficiency regulations such as the IMO's Carbon Intensity Indicator (CII) may limit commercial options for older ships that cannot improve their ratings. Against this backdrop, fitting energy-saving devices such as wind sails to extend vessel life and cut fuel costs has become a practical option for some owners.
Impact on Shippers
For ocean freight shippers, changes in the tanker fleet structure mainly transmit through fuel costs and freight rates. If more older ships continue trading after retrofits, near-term capacity supply should remain relatively stable, helping to curb sharp rate swings; however, dry-docking for retrofits could tighten capacity locally. If fuel savings are partly passed through, they may put some downward pressure on rates, though the extent depends on route supply and demand.
On transit times, older ships staying in service mean a rising average fleet age, and equipment reliability and speed performance could affect schedule reliability, so shippers should pay attention to vessel age and maintenance records. Customs clearance is not directly affected, but if owners incorporate carbon costs into freight surcharges, shippers should watch the relevant fee clauses.
Recommendations
Shippers are advised to check whether carriers impose surcharges related to carbon intensity compliance or retrofit programmes when signing ocean freight contracts, and to ask about specific vessel age and upcoming dry-docking schedules when booking, so as to estimate transit times reasonably. For long-term routes, shippers can request fleet renewal and retrofit plans from their freight forwarders to prepare inventory and channel contingency plans in advance.