The global order book for new very large crude carriers (VLCCs), which can each carry 2 million barrels of oil, would expand the fleet by 36 percent, according to London-based shipbroker Clarkson.
More than 80 percent of those ships will be delivered from 2008 onwards. Orders were spurred by above-average tanker rates over the last three years.
New ships mean that global tanker supply is likely to grow faster than demand, reducing profit for Sohmen and other tanker operators such as Frontline.
Hire rates for tankers plying the route from the Persian Gulf to Japan and China averaged 9.2 percent less in 2006 than the previous year, as measured by the industry's Worldscale standard, as the fleet expanded at a faster rate than oil shipments from Middle East producers.
Supertanker volumes overtake fuel flow
Stupid economist they still like to use the term produce rather than extract.