The VLCC tanker market : the present, past and future : a historical fleet analysis followed by a stochastic partial equilibrium model of the spot freight market

Abstract

This thesis analyzes the development of the VLLC fleet over the last two decades. On the basis of collected data, the supply curves of the current and historical fleets are calculated under three distinguished speed regimes; speed optimized regime, fixed speed at maximum speed and fixed speed at 12 knots. We then proceed with the current fleet and construct a partial equilibrium model of the spot freight market. Our model incorporates a stochastic process surrounding bunker price, demand, scrapping and new building. The model is applied to simulate the probability distribution of the future spot rates under the different speed regimes. Finally we find the short-term distribution of the spot rate when demand is high and low.