1. Tanker Markets Overview 31 May 2010, Jeddah Peter M Swift, MD, INTERTANKO

2. INTERTANKO Today 260 + members operating ca. 3,100 ships > 75% of the independent oil tanker fleet and > 85% of the chemical carrier fleet 300 + associate members: in oil and chemical tanker related businesses 15 Committees – 5 Regional Panels Principal Offices – London and Oslo Representative Offices in US, Asia and Brussels Observer Status at IMO, IOPC, OECD and UNCTAD International Association of Independent Tanker Owners

3. Global dependence on oil tanker transportation World Oil Consumption 3.8 billion ts Transported by sea 2.4 billion ts > 60% transported by sea

4. Tanker shipping today - an industry to be proud of Safe Environmentally responsible Energy efficient Cost effective

5. Accidental oil pollution from tankers Based on ITOPF/Fearnleys 1000 ts spilt 1000 bn tonne miles trade

6. Tanker Shipping’s GREEN Credentials This car, weighing one tonne, uses 1 litre of fuel to move 20 kms This oil tanker uses 1 litre of fuel to move one tonne of cargo 2,500 kms –more than twice as far as 20 years ago

7. Source: OPEC/US pub. stats USD per barrel Oil price and freight rates 1970-2010 – real and nominal

8. Investment in New Tonnage - Move to Double Hulls More than USD 500 billion invested since 2000 with the result that ~95% of tanker fleet* double hulled by end 2010 * over 10,000 dwt

9. Average age tanker fleet above 10,000 dwt Based on LRFairplay Years

10. Key Challenges for Tanker and other Ship Owners Today Establishing and maintaining an international framework of consistent regulations and standards Delivering best environmental performance Ensuring availability of good people (and quality ships) Ensuring the welfare and well-being of ships’ crews Meeting the challenges of Piracy

11. Key Environmental Challenges Air emissions - Green House Gases - Exhaust Gas emissions (Annex VI & its revisions) - VOC emissions Spill Prevention and Response Planning Ballast Water management Biofouling Antifouling systems Ship Recycling Port Reception Facilities (adequacy & affordability) Waste management (onboard and ashore) Radiated Noise pollution Cetacean strikes

12. Tanker Markets Today ? Demand down, but recovering ? Supply up, and still growing ? Rates down, and ?

13. Tanker Markets Today Demand : World oil trade Supply : Ships on Order & Fleet development Tanker market Shipbuilding capacity

14. World Oil Demand vs. GDP Source: Clarksons (September 2009)

15. Demand uncertainties Global or regional economic stagnation New pipelines Natural and other disasters Climate Change legislation Oil price Inventory levels Eastern Siberian Pacific Ocean Pipeline

16. Orderbook – All ships (>999GT) Source: Clarksons, April 2010 Orderbook Development (All ship types)

17. Orderbook by ship type (as % existing fleet) Source: Clarksons (September 2009)

18. Tanker Contracting 1996-2010 Source: Clarksons, April 2010

19. Newbuilding Tanker Prices 0 30 60 90 120 150 180 Jan-76Jan-78Jan-80Jan-82Jan-84 Jan-86Jan-88Jan-90Jan-92Jan-94Jan-96Jan-98Jan-00Jan-02Jan-04 Jan-06Jan-08 Jan-10 $ million VLCCSuezmaxAframaxPanamaxMR Product Source: Clarksons, April 2010

20. Tanker Fleet Development 0 50 100 150 200 250 300 350 400 450 500 550 197019721974197619781980 1982 1984198619881990199219941996199820002002 2004200620082010 2012 deadweight (million) 10-24 tanker handy MR Panamax Aframax Suezmax VLCC Source: Clarksons (September 2009)

21. Tanker Age Profile 0 100 200 300 400 500 1970-19741975-1979 198019811982198319841985198619871988 1989199019911992199319941995199619971998199920002001200220032004200520062007 20082009201020112012 20132014 no of vessels Handy MR Panamax Aframax Suezmax VLCC Source: Clarksons, April 2010

22. Tanker Fleet Comparisons 12 6596 19 38 33 21 29 13 20 69 68 69 73 75 58 0 10 20 30 40 50 60 70 80 VLCCSuezmaxAframaxPanamaxMRHandy percentage of exisiting fleet non-double hullOn OrderBuilt since 2000 Source: Clarksons, April 2010

23. Where next for Single Hull Tankers ? Current trading status 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% VLCCSuezmaxAframaxPanamaxMRHandyTotal Fleet % of single hull fleet Storage% Inactive% Domestic Trading% Normal Trading% Source: Clarksons, April 2010 (datasource: Clarksons/LLI)

24. Where next for Single Hull Tankers ? Trading beyond 2010 ? AustraliaNo ChinaNo EU No Mexico No Romania No S KoreaNo* PhilippinesNo* UAE No* (*No official note sent to IMO yet) BahamasYes BarbadosYes Liberia Yes Marshall Isl.Yes Panama FlagYes Japan Yes SingaporeYes India Yes Hong KongYes** (** Max. 20 years old) Flag/Port State positions re MARPOL 13G trading up to the age of 25 years United States N/A (OPA90)

25. Source: Baltic Exchange/INTERTANKO USD/Day Average tanker freight rates (based on the Baltic rates) May 2010

26. Lower Freight Rates & Fleet surpluses Implications ? Challenge to maintain quality and standards, - e.g. maintenance, training Challenge to address the issues of the day – e.g. including environmental challenges Potentially made even worse if new ships are of low standard ?

27. Shipbuilding capacity A future unknown factor !

28. Shipbuilding output and forecast Source: Worldyards/INTERTANKO Aug 09 m cgt

29. Shipbuilding output potential Source: Worldyards/INTERTANKO Aug 09 m cgt Worldwide estimates in m cgt - small and big ships (Aug 09)

30. Shipyard output potential - surplus Implications ? Distressed sales / lower prices Quality and standards maintained or weakened Pressure on suppliers and sub-contractors Greater customer focus & customisation and any government interventions ?

31. Market Forecast !

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33. Thank you اﺮﻜﺷ For more information, please visit: www.intertanko.com www.maritimefoundation.com www.poseidonchallenge.com www.shippingfacts.com London, Oslo. Washington, Singapore and Brussels

34. Tanker Incidents and accidental pollution Number incidents Based on data from LMIU, ITOPF + others ‘000 ts pollution

35. Fleet Growth -5 0 5 10 15 20 VLCCSmaxAmaxPmaxMRHandy % change y-o-y 2000-2009200920102011 *Includes slippage, cancellation and removal ideas Source: Clarksons, April 2010

36. VLCCs* deliveries and deletions Source: INTERTANKO, LR Fairplay current fleet, Clarkson deliveries Number 1966 Idemitsu Maru, the first VLCC delivered by IHI, 206,000 dwt 1976 Seawise Giant, the largest tanker delivered by Sumitomo H.I, 564,650 dwt 1974 the largest number of VLCCs delivered, 124 1982 only one VLCC was delivered * Here VLCCs include all tankers above 200,000 dwt ** trading include short term storage, not lay-up or long term storage

37. Tanker sales for demolition and VLCC freight rate Source: INTERTANKO m dwt USD / day * Until week ending 4 September ** Sales for demolition until 4 September *** Clarkson Freight rate AG-Japan week ending 4 September