The Substance of Things Not Seen: Optimistic Mid-size Tanker Companies Step Out in Faith

Despite overcapacity and the low rates which continue to plague the tanker industry, ownership consolidation of world-class independent oil tanker companies is on the rise. And many mid-size companies, believing in the future of the business – particularly the product tanker business – are exercising their faith.

ICB, Benor, Bona, Eletson, London and Overseas Freighters (LOF) have all taken significant action to consolidate and build tanker ownership. Maturation of this segment of the business, while not complete as the following data from mid-year indicates, points to a healthy trend of ownership consolidation into the hands of long-term owner/operators.

As we reviewed the 1993 and first half financials, the obvious was just that – consumption and global production of oil rose somewhat, but transportation capacity also increased, slowing to a trickle, already-strained cash flow among tanker companies. Nevertheless, consolidation of tanker ownership among the principal tanker owner/operators increased in a less obvious, but still evident trend.

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