The Demise Of The Panamax Tanker

The Aframax trades in the Pacific are due for a change

For many years now, the fleet of dirty Panamax tankers has been declining. According to our fleet statistics, there are only 93 Panamax tankers left, with an average age of 14.8 years. There are no Panamaxes on order and some 63% of the fleet is older than 15 years. The situation for LR1’s, the “clean” version of the Panamax tanker, used to be different.

It is not a large fleet (362 vessels), but it is younger (average age 12.7 years) and 66 vessels were delivered in a five year period between 2016 and 2020. However, only 2 vessels were delivered in 2021 and the orderbook has dried up completely. A large transaction between two leading owners put this segment in the spotlight. Scorpio Tankers sold its entire LR1 fleet of 12 vessels to Hafnia (a member of the BW Group).

Hafnia, which already owns 24 LR1s and has another 10 on time-charter/bareboat, is doubling down on the segment. Are we witnessing the end of clean Panamax segment as we know it? Is it becoming a niche segment? In this Weekly Tanker Opinion, we are taking a look at which factors may be contributing to the reduced popularity of this vessel class

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