History of The Oil Tanker - Oil Crisis and Consolidation

Oil Crisis and Consolidation

On 10 October 1973 the Yom Kippur War begun, causing the 1973 oil crisis, tripling oil prices to US$10 per barrel, halting economic growth. New build ships sometimes went straight from the yard to lay up. The situation worsened when the Suez Canal was reopened in 1975. Just when the situation begun to improve in 1979, the Iranian Revolution caused the second oil crisis, causing oil prices to rise to US$30. Ships were sometimes sent to the breakers after being in service for only ten years. It took until the end of the 1980s before any profits were being made in oil transport.

In 1979, World-Wide Shipping of Yue-Kong Pao with 204 vessels, many of them tankers, was the largest shipping company in the world with a tonnage of 20.5 million, but in the five years after that he sold some 140 vessels to manage the crisis. In 1980 Daniel K. Ludwig had the largest fleet after Y. K. Pao and C. Y. Tung and was regarded the richest man of the United States. Currently, John Fredriksen owns the largest tanker operator in the world, Frontline. He also owns almost ten percent of the largest shipping company in the world, Overseas Shipholding Group.

In 1976, the Intervention Convention was used for the first time when the US Coast Guard took on the salvage of the Argo Merchant, although the vessel was in international waters. This was the first time the monopoly of flag states was broken through.

The Exxon Valdez oil spill was the incentive to introduce legislation requiring tankers to have a double hull, a measure that is not seen as the best solution by all experts. Where a double hull should minimize the consequenses after a disaster, Concordia Maritime developed the Stena V-MAX, a VLCC with two propellers, two rudders and two redundant engine rooms, where a single fault does not result in loss of steering, reducing the chances of a grounding.

The size of VLCC's and ULCC's limits their sailing area and available ports. In the United States, Louisiana Offshore Oil Port (LOOP) is the only facility that is able to handle VLCC's. To overcome this, lightering from large tankers in smaller ones that are able to reach the destination port. The largest oil terminal is Ras Tanura in Saudi Arabia.

ULCC's had not been built since the beginning of the 1980s until the Greek Hellespont Steamship Corporation ordered four double hull supertankers in 1999. These ships were built in 2002 and 2003 as the Hellespont Alhambra, Hellespont Metropolis, Hellespont Tara and Fairfax. Hellespont sold these ships to Overseas Shipholding Group and Euronav in 2004. These TI class supertankers — currently known as the TI Asia, TI Europe, TI Oceania, and TI Africa — are as of 2008 the worlds four largest working supertankers.

Each of the four sister ships has a capacity of over 441,500 DWT, a length overall of 380.0 metres (1,246.7 ft) and a cargo capacity of 3,166,353 barrels (503,409,900 l). The first ULCC tankers to be built for some 25 years, they were also the first ULCCs to be double-hulled. To differentiate them from smaller ULCCs, these ships are sometimes given the V-Plus size designation. In February 2008, their owners announced plans to convert TI Africa and the TI Asia into stationary floating storage and offloading units to be placed in the Al Shaheen oilfield near Qatar in late 2009.

With the exception of the pipeline, the tanker is the most cost-effective way to move oil today. Worldwide, tankers carry some 2 billion barrels (3.2×1011 l) annually, and the cost of transportation by tanker amounts to only US$0.02 per gallon at the pump.