TO THE general public most ships have the look of behemoths, but even within the industry ordering a brand-new very large crude carrier is one of the quickest ways you can make a statement.

Greek owners, who are the dominant owners of crude oil tankers and own about a quarter of the world’s fleet of 800 or so working VLCCs, have made their own statement by penning a flurry of orders in recent months. But about what?

A wide range of impulses can be projected on to those various recent orders. Here they may reflect the fulfilment of childhood dreams, or there a revisiting of family tradition.

More conventionally, some moves seem to reflect a determination to stay in the game, a commitment to renew a fleet, or a will to be among the first to use cleaner fuels.

Considering the suffering of tanker owners from low earnings recently, the orders can be considered countercyclical, which generally goes hand-in-hand with lower prices on a historical scale.

Another common feature this time round appears to be an eye on fast-diminishing slots at the relatively few yards in the Far East that construct VLCCs.

“Countercyclical does not necessarily always guarantee success. It is an important point that everyone needs to understand,” said Evangelos Pistiolis whose Central Group ordered four VLCCs in February from Hyundai Heavy Industries to follow a prior four contracted with the same builder last year.

“You have to order the right thing as well, and everyone else is trying to do it too.”

Mr Pistiolis burst on the scene as a young owner in 2004 with the flotation of TOP Tankers in the US and after initially making his reputation with suezmaxes has recently been ordered suezmaxes and medium-range product tankers with Hyundai Group yards. These will be his first VLCCs.

“Vs have always been my favourite vessel and at last it was the right moment,” he told Lloyd’s List. “But for me whenever Vs are at the low end of the price range and you can get a good deal from the yard it’s a safe bet, as long as you can sustain yourself through the painful times.”

Boom and bust 

VLCCs can justly be seen as the ultimate avatar of shipping’s boom and bust fortunes but Mr Pistiolis is among those who feel their time is coming.

“It’s important that we obtained a good entry price level, but also the end of the Covid story will bring a boom,” he said.

The first two of the eight newbuildings, already named Julius Caesar (IMO: 9912244) and Legio X Equestris (IMO: 9912256), have been chartered to Trafigura from delivery in early 2022 for three years with two separate annual extension options.

Stakes of 35% in each of the pair have been sold to Mr Pistiolis’ Nasdaq-listed company, nowadays branded as TOP Ships.

The owner said that he was “close” to arranging time charters for the second pair of newbuildings but that he also wanted to leave open the chance to resell one or more vessels in the series if, as expected, the value of VLCCs takes off in the near future.

That is partly contingent on supply and while fleet growth across the tanker sector has been relatively stagnant in recent years, the capacity to build new tonnage fast in the VLCC sector is particularly constrained with orders for large containerships, in particular, and to some extent liquefied natural gas carriers hogging precious construction berths. 

Central believes its most recent four-pack was the last such bloc of slots available for 2022 deliveries and multiple industry sources suggest that owners ordering even now will struggle to get VLCCs before late 2023 or even early 2024.

Another Greek owner to double its VLCC orderbook early this year was Latsco Shipping.

It booked two, also at HHI for delivery in the second half of 2022. They follow an initial pair ordered from the yard last November.

For the Latsis family shipping group, led by Paris Kassidokostas-Latsis, it is a first move into the biggest tankers since grandfather John Latsis acquired some of the world’s largest tankers in the 1980s.

Latsco has been expanding in recent years but until now the focus had been on product tankers and gas carriers.

“You can say it is an old stomping ground for the group,” said Latsco chief executive George Margaronis. “At the same time we think there is still a considerable runway ahead for fossil fuels, especially when they are being carried by the most eco and environmentally friendly ship.’’

Scrubbers installed 

As with Central’s and the vast majority of the VLCCs ordered by Greeks the Latsco quartet is expected to be installed with exhaust gas cleaning systems.

Exceptions include four 320,500 dwt tankers that the Angelicoussis Group, Greece’s biggest owner of VLCCs, ordered in February from Samsung Heavy Industries through its tanker arm Maran Tankers.

The dual-fuel vessels will be among the first VLCCs able to burn liquefied natural gas when they emerge from the yard in 2023. If a reported series cost of $415m is to be believed, this is reflected in a price differential of about $12m to $13m with conventional VLCCs ordered about the same time.

Maran is also in the throes of renewing its fleet. Lately the 20-year-old Maran Cygnus (IMO: 9227479) became the sixth of its older VLCCs sold since late last year.

The only other Greek owner to have ordered so many is Athenian Sea Carriers, which currently controls an all-VLCC fleet of six vessels. It booked a quartet late last year at Hyundai Samho Heavy Industries that are all scheduled for delivery next year.

The lack of prompt slots may go some way to explaining why another leading Greece-based VLCC player, Capital Maritime & Trading, recently clinched the acquisition of the first two of Athenian’s quartet. The deal was confirmed by sources familiar with the contracts.

If resale deals offer one potential route for determined owners to get their hands on new VLCCs if the optimum time for contracting with a yard is deemed to have passed, Navios Maritime Acquisition has created its own VLCC renewal pipeline through different means.

Since 2018 the Navios Group tanker arm has agreed 12-year bareboat charters with de-escalating purchase options for a total of four newbuilding Japanese VLCCs, the first of which, named Baghdad (IMO: 9876414), was delivered last October.

The second and third 310,000 tonners are due for delivery this year, with the fourth tanker to follow in 2022.

In each case, the bareboat charter-in agreements reflect an implied price of $84.5m per ship and Navios is chartering the vessels out at $27,816 daily for 10 years, with an optional five-year additional period at $29,751 per day. The structure is said to provide an annual free cashflow of about $5m for the company.

However, it is not only multiple ship orders from the leading VLCC players that suggest it is has been a good bet for those that can afford it, at least in recent months.

Samos Steamship, one of Greece’s oldest traditional shipowning outfits, has placed an order for a 301,000 dwt VLCC from a Japanese builder. The vessel is expected to be delivered in the first quarter of 2023.

The move is likely to be seen at least in part as a potential replacement for the company’s sole VLCC on the water, the Universal-built Kokkari, which it has had since delivery in 2008 and which will be 15 years when the new tanker joins Samos’ fleet.

Altogether, Greeks have about $2.8bn worth of VLCC tonnage on order and control 30% of segment’s current order book of about 100 vessels.