freight rates and the price of oil part company2051).pdf · charles r. weber company tankerreport...

CHARLES R. WEBER COMPANY TANKER

REPORT

MAY 2005

2005Freight Rates and the Price ofOil Part Company

mmaayy’0055IN THIS REPORT0011::11--22EXECUTIVE SUMMARYWILL TANKER SHIPPING TAKE OFF IN 2005?

0022::33--66WORLD OIL MARKETCRUDE OIL DEMAND - FORCAST FOR 2005 STRENGTHENS

AGAIN ++ OPEC’S MICRO MANAGEMENT DOES NOTHING

FOR MARKET CONFIDENCE ++ INSUFFICIENT CRUDE OIL

PRODUCTION CAPACITY ++ LONG TERM UNDERINVEST-

MENT IN THE REFINERY INDUSTRY

0033::77--99TANKER MARKETTHE LINK BETWEEN CRUDE OIL PRICES AND TANKER

FREIGHT RATES BREAKS IN 1Q05 ++ FREIGHT RATE

WEAKNESS ++ INVESTOR REACTION TO TANKER MARKET

PERFORMANCE

0044::1100--1133PROSPECTS FOR TANKER FREIGHT RATES 2005TANKER STOCKS HOLDING UP ++ CRUDE OIL DEMAND

GROWTH ++ CONTINUED LONG HAUL TRADE GROWTH

0055::1144--1166VESSEL SECTORSTANKER MARKET REVIEW ++ THE RANKINGS ++

0066::1177--2200VLCC FLEETTHE ACTUAL TRADING VLCC FLEET BASIS MAY 2005

WWeebbeerr TTAANNKKEERR RReeppoorrttCharles R. Weber Company Inc. Tanker Report ispublished four times a year. It reviews important top-ics within the tanker shipping industry and tanker sec-tors that are of particular interest. It focuses onchanges in tanker trading patterns and changes infleet supply and demand.

SSOOUURRCCEESS::Charles R. Weber Research, International EnergyAgency, Energy Information Agency, Lloyds MaritimeInformation Unit, Baltic Exchange, Global TradeInformation Services.

EEDDIITTOORRIIAALL BBOOAARRDDBasil G. Mavroleon - Managing DirectorDan O’Donnell - Director

CCOONNTTAACCTT DDEETTAAIILLSSJohnny M. KulukundisCharles R. Weber Company Inc.Greenwich Office Park OneGreenwich, Conneccticut, 06831, USAvoice:+1 203 629 2300fax:+1 203 629 9103e-mail:[email protected]: www.crweber.com

DISCLAIMERWhilst every care has been taken in the produc-tion of this study, no liability can be accepted forany loss incurred in any way whatsoever by anyperson who may seek to rely on the informationcontained herin. The information in this reportmay not be reproduced without he express writ-ten permission of the Charles R. Weber Comapny,Inc.

COPYRIGHT© 2005 Charles R. Weber Company, Inc.

ESSENTIAL READING FOR THE INTERNATIONAL OIL TRANSPORTATION INDUSTRY

”>>THERE IS NO DOUBT THAT THERE HAS BEEN GROWING CONCERN THAT CRUDE OIL SUPPLY WILL

Issue 02

Will Tanker Shipping Take Off in 2005?

The disappointing feature for tanker owners during 1Q05was that while crude oil prices remained close to levelsseen at the end of 2004, tanker spot earnings fell by around75% from peak levels in mid November 2004. However, itshould be pointed out that leading publicly quoted tankerowners still posted encouraging results for 1Q05 with netincome up an average of 48% compared to 1Q04 for OSG,OMI, Genmar and Teekay (see section 3 for more details oftanker company results). All be it a carry over from the avery firm fourth quarter of 2004 as discussed in our lastquarterly report.

The VLCC market illustrates this demise with average spotearnings for a modern vessel at around $50,000pd at theend of April compared to a peak of $221,455pd in the weekending 12th November 2004.

figure1

Figure 1 shows that there has been a reason-able correlation between crude oil prices andtanker earnings for the three year period up tothe start of this year, but that this link was welland truly broken during 1Q05.

The weakness of tanker freight rates during 1Q05 canbe explained by two major factors.

Firstly, the pace of tanker fleet expansion (up +6.2% in2004) was unabated at the start of the year with a netincrease of 7.4MnDwt (+2.2%) for first quarter 2005. Tankerdeliveries were particularly strong with 9MnDwt added,while tanker scrapping remains low, but is starting to creepup.

Secondly, high oil prices were finally translated in higherbunker prices at the start of the year, which significantlyincreased tanker voyage costs and helped drag tankerearnings lower. It is estimated that bunker prices have risenby 50% since the start of the year.

However, the continuing strength of tanker demandsuggests that the freight market has overshot.

Tanker demand as measured by crude oil production wasup 1.5Mnbd YOY in 1Q05 - despite falling slightly to83.8Mnbd from peak levels of 84.2Mnbd in 4Q04.

Therefore, the sluggish start to the year does not necessar-ily give rise to concerns for tanker freight rate prospects forthe remainder of the year.

Crude oil demand forecasts for 2005 strengthen again

Figure 2 shows the world crude oil supply/demand balance(source International Energy Agency, IEA) for 2003 and2004, as well as the IEA's demand forecast for 2005.

figure 2

1

CHARLES R. WEBER TANKER REPORT EXECUTIVE SUMMARY:01

BE UNABLE TO KEEP PACE WITH DEMAND. ONE OF THE PRIMARY WORRIES HAS BEEN THE LACK OF

The Link Between Tanker Earnings and Crude Oil

Prices Breaks in 1Q05

0

50,000

100,000

150,000

200,000

250,000

04/01/2002 10/01/2003 16/01/2004 21/01/2005

$day

20

25

30

35

40

45

50

55

60

$B

bl

VLCC Average Spot

Earnings

West Texas

Intermediate

IEA World Oil Supply/Demand Balance 2003-05

77

79

81

83

85

87

Mn

bd

Supply 79.2 78.4 79.4 81.7 82.3 82.4 83.2 84.2 83.8

Demand 80.4 77.3 79.4 82.1 82.5 81.1 81.9 84.5 84.6 82.7 83.7 86.1

1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05

While demand is not expected to reach growth levels of2004 the demand forecasts for 2005 have been revised up.

This latest forecasts from the IEA are up from theirDecember 2004 numbers and are now more in-line withother forecasting organizations that are also estimatingincreased growth.

Tanker freight rate prospects for the remainder of 2005

The strength of the shipping market at the end of last yearoccurred despite a 6.2% increase in the supply of tankertonnage. In 2004, supply negatives were overpoweredby a combination of surging world oil demand and ashift to an increased dependence on longer haul trades.

At the start of 2005, crude oil demand has continued tostrengthen (+2.6% yoy). However, the improvement incrude oil supply during 1Q05 has been less impressive(+1.7% yoy), while tanker supply growth has continued toforge ahead (+2.2%).

Fleet growth and high voyage costs will continue to actas a drag on tanker earnings in 2005, but freight ratespikes are probable during 2H05

High crude oil prices represent the biggest risk for a recov-ery in tanker rates in 2005 for two reasons. Firstly, if crudeoil prices remain high, then bunker prices (a major compo-nent of tanker voyage costs) will also remain high andtanker earnings will be depressed.

Secondly, the damaging impact of high crude oil prices ontanker profitability is being repeated across many otherindustries. Consequently, worldwide economic prosperity isbeing put at risk - as stressed in April by the IMF in its twiceyearly assessment of global economic prospects. A pro-longed period of high oil prices cannot be sustained, and willeventually cause crude oil demand to falter.

Rapid tanker supply growth, which is set to continue in2005, is nothing new. However, the fleet is expanding muchfaster (est. +6.0% 2005) than crude oil demand (est. +2.1%2005). Therefore, unless tanker long haul trades expandfaster than short haul trade - boosting tanker tonmiledemand - then the upside potential for tanker freight rateswill be restricted. China - with its reliance on long haul crudeoil imports - remains crucial to the fortunes of the tankermarket.

However, if crude oil prices can be maintained at "reason-able" levels (and the world economy achieves the "solid"

growth predicted by the IMF), and if Chinese crude oilimports (and to a lesser extent imports to India and theUnited States) continue to expand strongly, thensupply/demand tightness in the market will persist and therewill be every chance of significant tanker freight rate spikeslater in the year.

These spikes may be triggered by downstream bottlenecks,geopolitical tension; nervousness in the market caused bythe actions of OPEC or increased concern about sparecrude oil production capacity. The supply/demand balanceis so tight that even small events may have major conse-quences. However, the expected tanker freight rate spikesare unlikely to be as spectacular as in 2004 - unlessChinese crude oil imports increase at a faster rate than cur-rently forecast. Even if this happens, a lack of storage andrefinining capacity availability in the short term will serve tosomewhat cap these spikes.

2

CHARLES R. WEBER TANKER REPORT EXECUTIVE SUMMARY:01

SPARE PRODUCTION CAPACITY, GLOBAL PRODUCTION CAPACITY CLAIMS ARE NO LONGER BEING

(1) Prospects for the World Oil Market in 2005

Crude Oil Demand - Forecast for 2005 strengthensagain

Although not expected to match the bumper crude oildemand growth seen in 2004 (+2.72 Mnbd, +3.4%),demand forecasts for 2005 have been revised up to 1.77Mnbd (+2.1%) (source International Energy Agency, IEA).

This latest forecast for 2005 represents a 0.39Mnbdincrease compared to the IEA's forecast in December 2004,and brings the organisation into line with other forecastingorganizations that are also estimating growth of around2Mnbd. The US Government's Energy Information Agency(EIA) is predicting average crude oil demand growth of2.2Mnbd for 2005 and 2006.

The positive outlook for crude oil demand growth is under-pinned by positive world economic indicators. Chinesestrength is central to this positive outlook, and its economicperformance remains robust. Figure 3 shows that the valueof Chinese imports and exports is continuing to run along atrecord levels at the start of 2005.

figure 3

Nevertheless, some commentators argue that there is con-siderable economic risk in the Chinese economy despiteseemingly strong growth. The slow down in Chinese crudeoil imports at the start of the year (see figure 4) perhapspoints to some fragility with imports for 1Q05 (29.6MnTons)still lower than the corresponding period in 2004(30.1MnTons).

figure 4

Despite the slow start to the year, some forecasters contin-ue to expect significant Chinese crude oil import growth in2005 and 2006, albeit at a slower rate than in 2004 (source:EIA). They point to the government initiative to build astrategic petroleum reserve (SPR) as an important factorunderpinning crude oil demand in 2005 and beyond.Though progress with this (SPR) projects is reportedly notmoving as fast had been previously hoped for.

It is important to remember that despite all the attention,China remains an unknown quantity. At the start of 2004,most commentators were not expecting crude oil imports tobreak 100MnTons.

Year Crude Oil Imports % Chg Yoy (MnTons)

2002 69.4 2003 91.1 31.2%2004 122.8 34.8%2005e 139.1 13.3%2006e 155.4 11.7%

China may seem to be bathed in the light of a brightnew dawn, but it is struggling to fashion its peculiarbrand of capitalism inside a communist straight jacket.

3

CHARLES R. WEBER TANKER REPORT WORLD OIL MARKET:02

TAKEN AT FACE VALUE, AS THEY HAD BEEN IN THE PAST. AT THE END OF 2004, SAUDI ARABIA

China Imports

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

1 3 5 7 9 11

Months

$ M

illio

n

05

04

03

02

China Exports

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

1 3 5 7 9 11

Months

$ M

illio

n

05

04

03

02

China Crude Oil Imports

3000

4000

5000

6000

7000

8000

9000

10000

11000

12000

13000

10 11 12 1 2 3 4 5 6 7 8 9

Months

'000bd

2004/5

2003/4

2002/3

Crude Oil Supply - OPEC's micro manage-ment does nothing for market confidence atthe start of 2005

OPEC's successive production cuts in September 2003 (-0.9Mnbd) and February 2004 (-1Mnbd) contributed to thesurge in oil prices during 2004 because OPEC was cuttingcrude oil supply just as world crude oil demand was startingto take off.

Three subsequent production increases in 2004 (7/04+2Mnbd, 8/04 +0.5Mnbd, 9/04 +1Mnbd) were a belatedattempt to force crude oil supply to catch up with demand,and were insufficient to prevent crude oil prices reachingrecord levels (West Texas Intermediate $55.23 bbl on25.10.04).

figure 5

By the end of the year, crude oil prices were finally startingto respond to increased crude oil production (by both OPECand non-OPEC producers). However, OPEC likes to beproactive and - anticipating a 2Q05 seasonal lull in demand- elected to introduce an "unofficial"* quota reduction inearly December 2004 (-1Mnbd). This cut was an importantcatalyst in a renewed surge in crude oil prices, which hadfallen to around $41bbl (WTI) just before the quota cut wasannounced.

* "unofficial" quota because it didn't apply to all OPEC mem-bers

By mid March, crude oil prices had reached new record lev-els (West Texas Intermediate $56.47 bbl on 16.03.05). Atthis point, OPEC - although still concerned about a 2Q05seasonal lull in demand - was forced to introduce a counterseasonal increase in quota levels (+0.5Mnbd, 27.5Mnbd**)in order to try to control the upward spiral of oil prices.

** a further 0.5Mnbd is available if oil prices fail to respondto higher production levels.

4


INCREASED PRODUCTION TO 9.3 MNBD. WHEN OPEC PRODUCTION PEAKED IN OCTOBER 2004, THE

OPEC Quota Changes 2004-5

22

23

24

25

26

27

28

1/04 4/04 7/04 10/04 1/05 4/05

Mnbd

30

35

40

45

50

55

60

West

Texas I

nte

rmedia

te $

Bbl

OPEC Production Quota ex Iraq Actual OPEC Production ex NGLs & Iraq

West Texas Intermediate (right axis)

OPEC 129 10.2.04 Quota 23.5Mnbd ( -1.0Mnbd)

OPEC 131 3.6.04 Quota 25.5Mnbd (+2.0Mnbd) rising to 26Mnbd in August

OPEC 132 15.9.04 Quota 27Mnbd (+1.0Mnbd)

OPEC 135 16.3.05 Quota 27.5Mnbd (+1.5Mnbd)

OPEC 133 10.12.04 "Unofficial" Quota 26Mnbd ( -1.0Mnbd)

Its proactive policy of production cuts to head off crudeoil price falls ahead of an anticipated seasonal lull indemand had failed, and was replaced just three monthslater (and before the start of the seasonal lull) by a reac-tive policy of production increases to try to reign in runaway crude oil prices.

It seems that OPEC's attempt to micro-manage the crude oilprice by its frequent quota adjustment has not helped to cre-ate a stable, transparent crude oil market. Indeed OPEC -despite its protestations that health of the world economy isits primary consideration - injected further confusion into analready uncertain environment when it failed to provide areplacement system for its "target $22-28 price band" whichit formally abandoned at its January 2005 "extraordinary"meeting.

Of course, OPEC is only partly responsible for creatingthe environment that has proved so conducive to highprices. As OPEC points out there are a number of factorsat work that help explain the current era of high prices.

OPEC argues that far from crude oil supply failing to keepup with demand, the market is in fact well supplied withcrude oil, and points to improved OECD crude oil and prod-uct stock levels (see following charts) as evidence for this.

It contends that the oil prices have become inflated by acombination of psychological, short term and "outside" fac-tors rather than structural weaknesses in the market. Thesefactors include:

(i) Late winter northern hemisphere cold snap(ii) Expectation/concern of higher than expected crude

oil demand paralleling events in 2004(iii) Concern that there is insufficient spare produc

tion capacity to deal with a crude demand surgeor local production hiatus

(iv) Geopolitical tensions (Iran, Iraq, and Nigeria etc.)(v) Speculators - defined as non-commercials such as

hedge funds and more recently pension and index funds that are active in the futures market

(vi) Long term underinvestment in the refinery industry that has created a fragile infrastructureprone to frequent downstream bottlenecks andunable to deal with the increase in world crudeoil demand

All of the above are important factors underpinning highcrude oil prices. The following section will investigate someof these factors in more detail.

Insufficient Crude Oil Production Capacity

There is no doubt that there has been growing concern thatcrude oil supply will be unable to keep pace with demand.One of the primary worries has been the lack of spare pro-duction capacity. Rather like the recent imperative to reval-uate worldwide crude oil reserves following misreporting ofits reserves by Shell, production capacity claims are nolonger being taken at face value.

5


IEA CALCULATED THAT THE INDUSTRY WAS CLOSE TO ITS PHYSICAL MAXIMUM ”

Total OECD Industry Crude Oil Stocks

800

820

840

860

880

900

920

940

960

10 11 12 1 2 3 4 5 6 7 8 9

Months

MnT

ons

2004/5

2003/4

2002/3

Total OECD Industry Product Stocks

1200

1250

1300

1350

1400

1450

1500

10 11 12 1 2 3 4 5 6 7 8 9

Months

MnT

ons

2004/5

2003/4

2002/3

At the end 2004, Saudi Arabia increased its production to9.3Mnbd from 8.25Mnbd at the start of the year. WhenOPEC production peaked in October 2004, the IEA calcu-lated that the industry was close to its physical maximumwith OPEC having as little as 1Mnbd of spare productioncapacity.

Since then OPEC has taken positive steps to salve marketconcerns. It announced in early March 2005 that it hadincreased spare production capacity to 2Mnbd, and that thisfigure would exceed 3Mnbd by the end of 2005. Not all com-mentators believe that this is a realistic forecast.

International oil companies have also increased their invest-ment activities. This is illustrated by the figure below, whichshows that rig employment levels remain high (source:Baker Hughes). However, there are concerns as to whetherthe quality of the additional production capacity will be highenough to meet market requirements.figure 7

The downward revision in forecast non-OPEC crude oil sup-ply growth in 2005 has compounded the concerns sur-rounding the lack of spare production capacity. The IEA

downgraded its 1Q05 estimate for Non-OPEC crude oil sup-ply from 51.3Mnbd (December 2004) to 50.3Mnbd (April2005). Although some of the lost output has been trans-ferred to the end of the year, the downward revision on Non-OPEC supply will mean that more is expected of OPEC inits role of swing producer.

Long term Underinvestment in the Refinery Industry

There has been widespread concern voiced about theshortage of new refinery capacity coming on stream (espe-cially conversion capacity). Low profitability and underin-

vestment over many years has created an industry that is inpart ageing and unreliable - prone to outages and oftenlacking the flexibility to process heavy/sour crudes. With theindustry so stretched even minor outages/bottlenecks canhave a magnified impact.

New refinery plant is coming on stream (see table below).The United States and China will add a combined 1.1Mnbdof new capacity in 2005. However, concern about the lack ofrefinery capacity persists with the expectation of disloca-tions between the crude oil and crude oil product market.

New and Expansion Refining Capacity Scheduled toCome on Stream in 2005 (source: Oil & Gas Journal)

Country New Capacity

'000 Bbls/day

United States 665*China 478Indonesia 247Angola 200Greece 199India 176Colombia 162Abu Dhabi 77Bangladesh 74Croatia 62Canada 53Other 363

Total 2756

* There is some debate that the estimate for additionalUnited States refinery capacity is too high. The W.S.J. quot-ed PIRA on May 24th as saying that global refinery capaci-ty grew by only 700,000 b/d in 2003 & 2004. Barnes & Clickstate that since 1993, despite the number of U.S. operatingrefineries falling by 30 to 145, the industry added 1.62 mil-lion b/d of operable capacity, an aggregate expansion of10.7% or the equivalent of 8 new world-scale refineries,despite zero new refinery construction. They site two expla-nations: A constant trickle of major capital projects whichcollectively add capacity such as the following in ,000 b/d:

Before AfterValero (Premcor) Port Arthur TX 255 325Valero (Orion) Good Hope LA 155 230Murphy Meraux LA 100 125MarathonAshland Detroit MI 74 100Holly Artesia NM 58 75Valero Texas City 165 243

Totals 807 1,098Their other theory is capacity creep, where refiners increasecapacity not with capital but through better utilisation ofexisting “iron” and use of technology. They site EIA figuresfor 2003 as reporting an increase of capacity of 275,000 b/d.One would expect that the high gross margins presentlybeing experienced by refiners will induce them to continueto squeeze more from less....

6

CHARLES R. WEBER TANKER REPORT TANKER MARKET:03

wwwwww.crweber.ccoomm

World Rig Count

1500

1700

1900

2100

2300

2500

2700

10 11 12 1 2 3 4 5 6 7 8 9

Months

Num

ber

of

Rig

s

2004/5

2003/4

2002/3

(2) Tanker Market Performance in 1Q05

The Link between crude oil prices and tanker freightrates broken 1Q05

Figure 8 shows that there was a reasonable positive linearcorrelation between crude oil prices and tanker earnings forthe three year period up to the start of this year, but that thislink was well and truly broken during 1Q05.

VLCC average spot earnings fell to around $50,000pd atthe end of April 2005 compared to a peak of $221,455pd inthe week ending 12th November 2004, while crude oilprices have held on to the record levels achieved during4Q04

By contrast, figure 9 reveals that the equivalent positive lin-ear correlation between Capesize dry bulk freight rates andworld steel prices remains intact - although there are signsthat by the end of April/early May that dry bulk rates are alsostarting to slide.

Why tanker freight rates shadowed crude oil pricemovements in 2004

The relationship between commodity prices and freightrates is indirect. In 2004, crude oil prices surged partlybecause of wild card events like the hurricanes in theUSGulf, but mainly because unexpectedly strong crude oildemand (underpinned by Chinese economic expansion) ranahead of crude oil supply. Crude oil producers pulled out thestops to try and increase the supply of crude oil and thisintensified the tanker fleet workload with the result thatthere was a (lagged) improvement in tanker freight ratesstarting in May 2004.

The link between crude oil prices and tanker freight ratescan be broken as a result of structural changes to the sup-ply/demand balance e.g. significant tanker fleet additions,as well as short term factors such as local disruption tocrude oil supply (although this may also have the effect ofboosting rates as the tanker fleet is required to reposition),or even psychological factors.

Explaining the divergence between crude oil prices andtanker freight rates in 1Q05

The divergence between tanker rates and crude oil priceslooks dramatic and unusual. However, by focusing on theannual cycle of tanker freight rates (see figure 10), the pathof tanker freight rates during 1Q05 looks to be following afamiliar path - closely paralleling earnings at the start ofeach of the last two years.

figure 10

In light of the above chart, could it be that crude oil pricesare artificially inflated, while tanker freight rates areresponding to normal supply/demand factors? Alternatively,in the context of steadily increasing worldwide crude oildemand (+3.4% in 2004, +2.1%e in 2005), could it be thattanker rates are artificially low?

7



The Link Between Tanker Earnings and Crude Oil

Prices Breaks in 1Q05

0

50,000

100,000

150,000

200,000

250,000

04/01/2002 10/01/2003 16/01/2004 21/01/2005

$day

20

25

30

35

40

45

50

55

60

$B

bl

VLCC Average Spot

Earnings

West Texas

Intermediate

Still Connected - World Steel Price

and Capesize Spot Rates

220

270

320

370

420

470

520

570

620

670

720

Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05

$T

onne

4

9

14

19

24

29

34

39

$T

onne

Hot Rolled Coil Transaction Price (Av.

EU, Asia, USA) Source: MEPS

Tubarao-Beilun/Baoshan 150KDwct

Tanker Earnings Following the Same Routine?

0

50,000

100,000

150,000

200,000

250,000

1 2 3 4 5 6 7 8 9 10 11 12

Months

$day

2005

2004

2003

This section of the report will try to find where the balancelies.

As discussed earlier in section 1, there are a number offactors - structural, short term and psychological - thatcollectively explain the current era of very high crudeoil prices. Section 1 highlights nervousness in the crude oilmarket that has skewed the normal supply/demand balanceand helped underpin high oil prices. This nervousness hasbeen generated by concerns - both real and perceived -relating to potential crude oil supply shortages, the viabilityof spare crude oil production capacity, the potential for acrude oil demand surge like that in 2004, the role of specu-lators and underinvestment in the refinery industry.

However, section 1 also points out that although factors areat work to artificially boost price, the fundamental cause ofhigh oil prices is supply/demand tightness. Crude oildemand in 2004 (+3.4%) increased faster than in 2002(+0.7%) and 2003 (+2.4%) and as a result crude oil produc-tion has been pushed to its limits. The tightness in the mar-ket has been exacerbated by OPEC's clumsy attempts tomicro manage oil prices, and downstream bottlenecks.

figure 11

For another perspective, it is worth comparing the perform-ance of oil prices with the Dow Jones (see figure 11). Thisreveals that crude oil prices gains (prices have roughly dou-bled over the last two years) are well in excess of thosemade by a resurgent stock market, which has increased invalue by around one third over the same period.

The weakness of tanker freight rates during 1Q05 is dueto a number of factors.

(1) Continued Strong Fleet Expansion - +2.2% in 1Q05

Figure 12 shows that the pace of tanker fleet expansion (up+6.2% in 2004) was unabated at the start of the year with anet increase of 7.4MnDwt (+2.2%). Tanker deliveries wereparticularly strong with 9MnDwt added, while tanker scrap-ping remains low, but is starting to creep up.

figure 12

8



Dow Jones & Oil Price

Consolidate 2004 Gains During 1Q05

20

25

30

35

40

45

50

55

60

04/01/2002 10/01/2003 16/01/2004 21/01/2005

$B

bl

7000

7500

8000

8500

9000

9500

10000

10500

11000

Index

West Texas

Intermediate

Dow Jones

Tanker Fleet Expands by 2.2% in 1Q05

-2

-1

0

1

2

3

4

4 5 6 7 8 9 10 11 12 1 2 3

Mn

Dw

t

315

320

325

330

335

340

345

Mn

Dw

t

Deliveries Deletions Fleet

(2) High Bunker Prices

High crude oil prices have taken some time to translate intohigher bunker prices. However, figure 13 demonstrates thatfrom the beginning of the year to the end of April, bunkershave risen by close to 50% e.g. Singapore 380 cst hasclimbed from $159Ton to $284.5Ton over this period.Without wishing to overstate the importance of bunkerprices, this sharp escalation of a key tanker voyage costshas acted to depress tanker spot earnings during 1Q05.

figure 13

figure 14

(3) Lower Crude Oil Production

Crude oil production slipped back slightly during 1Q05 from84.2Mnbd to 83.8Mnbd, but this reduction is relatively smalland would not appear to justify such a dramatic fall in earn-ings.

Therefore, despite the negative impact of higher bunkerprices and fleet expansion, it would appear that tankerfreight rates have over corrected.

How Investors have reacted to the performance of thetanker market in 1Q05

Tanker orders were consistently above 2MnDwt per monthbetween August 2004 and January 2005 despite steadilyincreasing newbuilding prices. However, a significant rise inprices from February 2005 coupled with freight rate weak-ness has significantly curtailed contracting with a total of just1.4MnDwt ordered in February and March. It may be thecase that investors are also being put off by the long deliv-ery times for newbuildings. For example the earliest deliverydate for a VLCC is 3Q08.

Tanker secondhand sales were very buoyant up untilNovember 2004 when sales activity peaked at 6.3MnDwt.However, with 5 year vessels becoming more expensivethan newbuilds by the end of the 2004, investor second-hand activity has tailed off considerably - averaging1.8MnDwt for the period December 2004 to March 2005.figure 15

At the end of May, it is estimated that a VLCC newbuildingwill cost $126 mill, while a 5 year old VLCC is $120 mill. ASuezmax newbuilding $78 mill vs $75 for 5 year old and anewbuilding Aframax $65 mill vs $64 for 5 year old.

If vessel values are sustained at such high levels, thentanker investor activity levels in 2005 may be much lowerthan in 2004. Combined tanker orders and sales totaled10.5MnDwt for 1Q05, compared to 77MnDwt for full year2004.

At the moment, tanker investors are in "wait and see" mode.If there are significant freight market spikes in 2H05, theninvestors may be tempted to come back in even at suchhigh prices (and such late delivery dates). However, iffreight rates remain at disappointing levels, then vessel val-ues may correct sharply downward.

The next section looks at the prospects for tanker freightrates for the remainder of 2005.

9



Bunkers Dent Tanker Earnings at the Start of 2005

0

50,000

100,000

150,000

200,000

250,000

04/01/2002 10/01/2003 16/01/2004 21/01/2005

$day

100

120

140

160

180

200

220

240

260

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300

$T

on

VLCC Average Spot

Earnings

Bunkers Singapore

380 cst

Bunkers Catch up Oil Price Gains

100

120

140

160

180

200

220

240

260

280

300

04/01/2002 10/01/2003 16/01/2004 21/01/2005

$T

on

20

25

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35

40

45

50

55

60

$B

bl

Bunkers Singapore

380 cst

West Texas

Intermediate

Investor Interest Slows as Prices

Continue to Spiral

0

1

2

3

4

5

6

7

8

9

10

4 5 6 7 8 9 10 11 12 1 2 3

MnD

wt

Orders Sales

70

80

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100

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130

$M

illio

n

VLCC NB Price VLCC 5Yr Price

(3) Prospects for Tanker Freight Rates in 2005

Tanker stocks holding up

Although tanker spot earnings were disappointing during1Q05, and though influenced by 4th quarter 2004, shippingstocks provide a more positive indication regarding thestrength of the market for the remainder of the year. Figure16 - which plots Baltic Dirty Tanker Index against OverseasShipholding Group - reveals that tanker stocks have notbeen affected by lower freight rates. In fact tanker stocks fol-low very closely the path of crude oil prices, which seems tobe interpreted as the fundamental driver for this shippingsector. Figure 17 reveals that share price resilience wasunderpinned by strong results in 1Q05 for leading quoted

tanker companies.

figure 16figure 17

In the first quarterly publication of the year, we stressed that

strong earnings during 4Q04 were primarily the conse-quence of strong crude oil demand growth coupled withstrong growth in tanker long haul trades which acted as anaccelerator for tanker demand. These factors will continueto act as key positives throughout 2005.

Crude oil demand growth with help underpin tankerfreight rates in 2005

Looking ahead for the remainder of the year, it seems thatcrude oil demand growth will again be an important factorunderpinning the market over the next few months.However, forecast crude oil demand growth in 2005 (+2.1%)is lower than growth in 2004 (+3.4%) and would not beexpected to exert as positive an influence.

It should be pointed out though that China may yet againsurprise the market with the strength of its crude oil importrequirement.

Long haul trade growth will continue as an acceleratorfor tanker demand in 2005

It has been an accepted fact in tanker shipping for morethan thirty years that the Middle East with its relatively largecrude oil reserves will eventually dominate world tankerseaborne trade. Middle East seaborne trade routes are gen-erally longer than for other export regions.

Tonmile demand is a truer reflection of tanker demand thansimply using crude oil demand. It takes into account the dis-tance traveled to deliver each tonne of crude oil. Obviously,long haul trades will generate a higher tonmile demand thanshort trades for the same amount of cargo delivered.Therefore, long haul trades require more vessels than shorthaul trades for the same amount of cargo delivered.

The importance of long haul crude oil trades has also beenboosted by the preference for sweet/light crudes such asthose from West Africa and the North Sea. (Heavy/sourcrudes include certain grades from Saudi Arabia, Venezuelaand Mexico).

In 2004, China and the United States were responsible foraround 50% of the total increase in world crude oil demand(see figure 18). The Middle East was the major source ofthis extra demand, benefiting from problems with Nigerianand Venezuelan production coupled with declining NorthSea production.

The dependence on the Middle East for incremental crudeoil demand acted as an accelerator for tanker demand in2004. In 2005, crude oil demand growth is expected to slow,but once again the distribution of the extra demand willboost tanker tonmile demand with China and the UnitedStates again forecast to be the most important growthimport markets.

10

CHARLES R. WEBER TANKER REPORT FREIGHT RATES:04


Tanker Stocks Starting to React to Falling Earnings

500

1000

1500

2000

2500

3000

3500

09/05/2003 16/04/2004 11/03/2005

Index

15

25

35

45

55

65

75$S

hare

BDTI

Overseas Shipholding

Group

Listed Tanker Company Net Income -

Quarterly Results

0

50

100

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300

$M

illio

n

Teekay 189 98.5 245.3 224.6 279

OMI 56.4 30.3 50.5 108.5 75.8

OSG 76.2 45.4 68.5 211.1 164.9

General 78.3 41.6 54.6 140.5 68.5

1Q04 2Q04 3Q04 4Q04 1Q05

figure 18

The tables below (figures 19 and 20) break down the distri-bution of Chinese and United States crude oil imports byexporting country.

figure 19

China crude oil imports are dominated by long haul tradesfrom the Middle East (and also West Africa). Exports fromOman and Angola, the second and third largest exporters toChina, increased by 76% and 60% respectively in 2004(based on full year data).

It should be noted that the fastest growing exporter of crudeoil to China is Russia. Most crude oil from Russia entersChina by train, while in the future pipeline transportation islikely to dominate.

An important landmark was achieved on 30th March 2005when the 441,000Dwt TI Europe (operated by TankersInternational) received Government approval to dock atNingbo. Prior to the TI Europe, the largest vessels to call atNingbo was less that 320,000Dwt. Four other terminals inChina will be able to handle upto 500,000 dwt vessels in thenear future. The visit illustrates the growing importance ofChina to the VLCC sector.

figure 20

In contrast to China, US crude oil imports are not sodependent on long haul trades. Near neighbors - Canada,Venezuela and Mexico - were the top three exporters to theUS last year.

Saudi Arabia was the largest exporter to the US in 2003, butwas only 4th largest in 2004. Its exports fell by 13% in 2004(based on full year data).

However, other long haul trades from Iraq and Kuwait wereup 50% and 13% respectively.

11



Estimated Annual World Oil Demand Growth 2000-2005Source: IEA (April 2005)Figures Million barrels per dayRegions 00-99 01-00 02-01 03-02 04-03 05-04

Forecast

North America 0.26 -0.06 0.10 0.47 0.61 0.36Latin America 0.00 0.00 -0.04 -0.10 0.17 0.12FSU 0.08 0.00 -0.20 0.12 0.13 0.05Europe -0.12 0.21 0.00 0.20 0.24 0.11OECD Pacific -0.04 -0.07 -0.04 0.14 -0.15 0.00China 0.26 0.12 0.30 0.55 0.86 0.50Other Asia 0.09 0.18 0.27 0.22 0.47 0.24

Subtotal Asia 0.31 0.23 0.53 0.91 1.18 0.75Middle East 0.12 0.17 0.17 0.20 0.32 0.29Africa 0.00 0.13 0.08 0.04 0.07 0.09

World 0.66 0.67 0.63 1.84 2.72 1.77

China Crude Oil Imports 1995-2004Source: Global Trade Information Services

Figures in Million TonnesExporter Voyage

Duration

Units 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Saudi Arabia Long Haul MnTons 0.34 0.23 0.50 1.81 2.50 5.73 8.78 11.39 15.18 17.24

% Chg -32% 117% 262% 38% 129% 53% 30% 33% 14%Oman Long Haul MnTons 3.65 5.65 9.03 5.67 5.02 15.60 8.14 8.05 9.28 16.35

% Chg 55% 60% -37% -11% 211% -48% -1% 15% 76%Angola Long Haul MnTons 1.00 1.66 3.84 1.10 2.88 8.64 3.80 5.71 10.10 16.21

% Chg 66% 131% -71% 160% 200% -56% 50% 77% 60%Iran Long Haul MnTons 0.93 2.31 2.76 3.62 3.95 7.00 10.85 10.63 12.39 13.24

% Chg 148% 19% 31% 9% 77% 55% -2% 17% 7%Russia Short Haul/ MnTons 0.04 0.32 0.48 0.14 0.57 1.48 1.77 3.03 5.25 10.78

Overland % Chg 773% 49% -70% 296% 158% 20% 72% 73% 105%Sudan Long Haul MnTons 0.00 0.00 0.27 3.31 4.97 6.43 6.26 5.77

% Chg 50% 29% -3% -8%Vietnam Medium Haul MnTons 0.76 1.01 1.50 0.87 1.51 3.16 3.36 3.54 3.51 5.35

% Chg 32% 49% -42% 75% 109% 6% 5% -1% 53%Yemen Long Haul MnTons 2.47 3.77 4.06 3.75 4.13 3.61 2.29 2.26 7.00 4.91

% Chg 52% 8% -8% 10% -13% -37% -1% 209% -30%Congo Long Haul MnTons 0.03 0.13 0.98 0.38 0.38 1.45 0.64 1.05 3.39 4.77

% Chg 390% 681% -61% 1% 278% -56% 63% 224% 41%Equatorial GuineaLong Haul MnTons 0.20 0.24 0.81 0.92 2.15 1.78 1.46 3.48

% Chg 19% 234% 13% 134% -17% -18% 139%Indonesia Medium Haul MnTons 5.28 6.30 6.59 3.42 3.95 4.58 2.65 3.24 3.33 3.43

% Chg 19% 5% -48% 16% 16% -42% 22% 3% 3%Norway Long Haul MnTons 0.99 0.49 2.01 1.48 0.92 2.11 0.93 2.01

% Chg -50% 310% -26% -38% 130% -56% 116%Other MnTons 2.59 1.25 4.56 5.31 8.63 13.19 9.95 10.20 13.05 19.27

% Chg -52% 266% 17% 62% 53% -25% 2% 28% 48%Total MnTons 17.09 22.62 35.47 26.80 36.61 70.13 60.26 69.41 91.13 122.82

% Chg 32% 57% -24% 37% 92% -14% 15% 31% 35%

United States Crude Oil Imports 1995-2004Source: Global Trade Information Services

Figures in Million BarrelsExporter Voyage

Duration

Units 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Canada Short Haul/ MnBbls 379 396 425 461 424 501 na 521 551 581

Overland % Chg 4% 7% 8% -8% 18% 6% 5%Venezuela Short Haul MnBbls 425 454 513 522 461 500 na 511 506 577

% Chg 7% 13% 2% -12% 8% -1% 14%Mexico Short Haul/ MnBbls 346 337 484 469 448 473 na 537 568 567

Overland % Chg -3% 44% -3% -5% 6% 6% 0%Saudi Arabia Long Haul MnBbls 474 407 482 507 490 507 na 544 633 552

% Chg -14% 18% 5% -4% 4% 16% -13%Nigeria Medium Haul MnBbls 264 269 304 287 231 343 na 221 317 393

% Chg 2% 13% -6% -20% 49% 44% 24%Iraq Long Haul MnBbls 17 108 263 232 na 174 165 247

% Chg 532% 143% -12% -5% 50%Algeria Medium Haul MnBbls 9 6 12 7 7 0 na 54 98 123

% Chg -33% 106% -45% 8% -100% 80% 26%Angola Medium Haul MnBbls 130 129 142 172 141 121 na 127 143 117

% Chg -1% 10% 21% -18% -15% 12% -18%United Kingdom Medium Haul MnBbls 141 93 72 70 100 107 na 151 150 99

% Chg -34% -23% -3% 43% 8% -1% -34%Norway Medium Haul MnBbls 91 105 99 84 111 117 na 146 89 92

% Chg 15% -6% -15% 33% 5% -39% 3%Kuwait Long Haul MnBbls 81 87 109 113 84 101 na 82 77 87

% Chg 8% 25% 4% -26% 20% -7% 13%Ecuador Short Haul MnBbls 45 37 37 33 31 40 na 41 51 85

% Chg -18% 0% -9% -8% 29% 24% 66%Other MnBbls 319 345 382 424 434 358 na 399 414 409

% Chg 8% 11% 11% 2% -17% 4% -1%Total MnBbls 2704 2665 3077 3258 3224 3399 na 3508 3761 3929

% Chg -1% 15% 6% -1% 5% 7% 4%

Short term Tanker Freight Rate Forecast

Fleet growth and high voyage costs will continue to act as adrag on tanker earnings in 2005, but freight rate spikes areprobable during 2H05

High crude oil prices represent the biggest risk for a recov-ery in tanker rates in 2005 for two reasons. Firstly, if crudeoil prices remain high, then bunker prices (a major compo-nent of tanker voyage costs) will also remain high andtanker earnings will be depressed.

Secondly, the damaging impact of high crude oil prices ontanker profitability is being repeated across many otherindustries. Consequently, worldwide economic prosperity isbeing put at risk - as stressed in April by the IMF in its twiceyearly assessment of global economic prospects. A pro-longed period of high oil prices cannot be sustained, and willeventually cause crude oil demand to falter.

Rapid tanker supply growth, which is set to continue in2005, is nothing new. However, the fleet is expanding muchfaster (est. +6.0% 2005) than crude oil demand (est. +2.1%2005). Therefore, unless tanker long haul trades expandfaster than short haul trade - boosting tanker tonmiledemand - then the upside potential for tanker freight rateswill be restricted. China - with its reliance on long haul crudeoil imports - remains crucial to the fortunes of the tankermarket.

However, if crude oil prices can be maintained at "reason-able" levels (and the world economy achieves the "solid"growth predicted by the IMF), and ifChinese crude oil imports (and to alesser extent imports to India andthe United States) continue toexpand strongly, thensupply/demand tightness in themarket will persist and there will beevery chance of significant tankerfreight rate spikes later in the year.

These spikes may be triggered bydownstream bottlenecks, geopoliti-cal tension; nervousness in themarket caused by the actions ofOPEC or increased concern aboutspare crude oil production capacity.The supply/demand balance is sotight that even small events mayhave major consequences.However, the expected tankerfreight rate spikes are unlikely to beas spectacular as in 2004 - unlessChinese crude oil imports increaseat a faster rate than currently fore-cast.

Long term Tanker Supply/Demand Balance Forecast2005-2010

Figure 21 compares world crude oil demand and tankersupply (fleet >=10,000Dwt) for the period 2000-2004 andthen projects forward for the period 2005-2010.

There are two crude oil demand forecasts: The "low" caseis based on annual average growth of 1.3%, which corre-sponds to the average historical growth rate 1998-2003.The "high" case is based on the IEA forecast (April 2004) of2.1% for 2005, and an annual average growth rate of 2.3%for 2006-10, which is 0.5% higher than the average growthrate for the last 10 years. (The growth rate has fallen below1.3% on three occasions in the last 10 years - in 1998(0.5%), 2001 (0.9%), and 2002 (0.8%)).

There are also two tanker supply forecasts: The "high"case reflects deletions based on IMO's phase-out schedule,and orders based on scheduled orderbook deliveries for2005-7 and for 2008-10 deliveries based on estimatedannual average deliveries for the period 2002-7 (a boomperiod for tanker deliveries). The "average" case reflects a20% increase on IMO's phase-out schedule, and deliveriesbased on scheduled orderbook deliveries for 2005-7 (as for"high" case) and for 2008-10 deliveries based on 2001orders (the low point for deliveries in the period 2000-7).

figure 21

12



World Crude Oil Demand v Tanker Supply

History 2000-4 & Forecast 2005-10

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00 01 02 03 04 e05 e06 e07 e08 e09 e10

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Tanker Supply - High Case

Tanker Supply - Average Case

World Oil Demand (Forecast

Growth av 2.3% p.a.)

World Oil Demand (Forecast

Growth av 1.3% p.a.)

It should be noted that the forecast methodology is a rela-tively simplistic approach to supply/demand balancing. Forexample in the case of measuring tanker supply, there is noallowance for changing trade patterns which impacts on theaverage transportation distance of a barrel of crude oil(measured in seaborne tonne-miles). This is an importantconsideration when calculating how far tonnage supply willstretch i.e. effective supply.

Nevertheless, (within the confines of this rough measure) itis apparent that under both the "high" and "average" supplycases there will be enough tonnage overall to match/exceedthe "low"/"high" demand scenarios until 2009. However, in2010 the sharp acceleration in removals under IMO phase-out schedules will create a potential shortfall of tanker ton-nage (1).

It is clear that the tanker fleet is in a potentially perilous posi-tion. Today the tanker orderbook is equivalent to 24% ofthe tanker trading fleet. Under the "high" and "average"supply cases, the fleet is set to expand at between 4.2%and 5.8% p.a. over the next 5 years (2005-9), which isrevised up from 3.9% and 5.5% respectively in January2005. This compares to demand growth of 2.3% under the"high" demand case. Notwithstanding, the growingimportance of long haul trades (2), the tanker marketwill be extremely vulnerable to demand fluctuationsduring this period. For example, a major concern is thatChina will not sustain its phenomenal growth rates of thelast few years.

Therefore, strong crude oil demand growth of 2%+ p.a.and a further significant shift towards long haul tradesare the key factors in ensuring consistently strongtanker rates for 2005-10.

If "effective" demand (taking into account tanker tonmiles)falters, it is unlikely that the supply curve will follow eitherthat shown in the "high" or "average" supply cases. It is per-haps more likely that supply will follow a third way or "low"case. With little scope to halt fleet growth through a slowdown in orders (the orderbooks are virtually full up to theend of 2007), it is the majority of single hull tankers (as wellas double side and double bottom) tonnage that will comeunder pressure to scrap even more rapidly than in the "aver-age" supply case (20% higher than the IMO scrapping rulesdemand) in order to slow down the rate of tanker supplyexpansion.

(1) The majority of tanker single hull tonnage will not befinally phased out until 2010, and even then the ContinuousAssessment Scheme (CAS) affords a further extension tothe trading life of these vessels. However, as discussed, iftanker rates come under significant downward pressure,this majority may exit the market earlier than the 2010 cutoff - especially with the extremely high level of scrap values

and opportunities for larger tankers to find alternativeemployment as storage or FPSO vessels. It is not yet clearhow many tanker owners have so far embarked on puttingtheir vessels through CAS, although it is probably only ahandful.

(2) As discussed the impact of a shift towards long haultrades was crucial to the strength of the tanker market in2004. World crude oil demand of 3.4% was effectivelyboosted by the growth of long haul trades, so that demandmore than offset the burden of 6.2% tanker fleet growth.

The growing importance of long haul trades will continue inthe short and long term. For example, the rapid economicrise of China will continue to foster long haul trades fromregions like West Africa, the Black Sea and even the NorthSea, while the decline of North Sea production (down to6.1Mnbd in 2004 compared to 6.8Mnbd in 2000) willincrease the reliance on Middle East production. The pref-erence for sweet/light crudes also has a positive impact ontanker tonmile demand.

13



(4) A Review of the Tanker Market in 1Q05 byVessel Segment

In order to help highlight the key developments in each ves-sel segment, a system of rankings has been put together(figure 22) to reflect the development of key performanceindicators in 2005. Amongst other things, these rankingsshow which segment has attracted the most investment sofar in 2005, and which has grown fastest.

The Rankings 1Q05 (all figures as % of relevant sector trading fleet)

figure 22

The above table shows that the Panamax sector remainsthe most popular sector with investors. The equivalent of3% of the Panamax fleet was contracted during 1Q05,which has maintained the orderbook at a level equivalent tomore than 50% of the trading fleet.

By contrast the Suezmax sector has received no interestfrom investors at the start of the year.

The Panamax sector has the highest delivery percentagefor 1Q05 (4.4%) and - despite also recording the highestpercentage of deletions (1.9%) - is also the fastest growingsector (+2.5%). The VLCC sector (+2.3%) is the only othersegment where fleet growth exceeded overall fleet expan-sion (+2.2%) in 1Q05.

The ranking table for 2004 is included here for to allow com-parisons to be made with 2005.

The Rankings 2004 (all figures as % of relevant sector trading fleet)

figure 23

The following sections recap developments in 2004 and1Q05, and provide updated fleet forecasts 2005-2010 foreach of the vessel sectors.

14


CHARLES R. WEBER TANKER REPORT VESSEL SECTORS:05

Deliveries % Scrap % Orders % Sales % Obook% Growth %

VLCC 2.3 0.0 1.1 2.8 17.6 2.3

Suezmax 2.3 0.6 0.0 2.4 23.5 1.7

Aframax 2.7 0.9 1.7 2.7 26.1 1.9

Panamax 4.4 1.9 3.0 3.5 54.8 2.5

Handy 2.4 0.3 1.5 2.1 26.5 2.1

Total 2.5 0.5 1.2 2.6 24.3 2.2

Deliveries % Scrap % Orders % Sales % Obook% Growth %

VLCC 7.1 1.2 8.9 12.9 19.3 6.3

Suezmax 8.2 5.5 8.2 6.8 25.1 5.5

Aframax 8.7 4.0 12.6 8.3 27.0 4.9

Panamax 13.9 5.6 26.5 5.1 55.4 9.0

Handy 10.8 2.8 14.3 4.9 26.9 8.7

Total 8.7 2.6 11.7 9.1 25.5 6.5

VLCC Sector:The Hot Button Sector

There is an on-going debate about exact-ly how scheduled IMO scapping in thissector will affect the market. We haveincluded the present trading fleet at theback of this report to try and get to thebottom of this question.

As discussed earlier in this quarterly, theincrease in long-haul trades and globaloil consumption has placed a greaterreliance on this sector of the market,there is in essence some room toincrease the orderbook through the 2010cut off. Also a number of vessels willhave the flexibility to trade in certain mar-kets after the 2010 cut off.

The start of the year proved disappoint-ing for VLCC owners as rates rapidlyretreated from the historic highs of the fourth quarter. As weentered the new year rates fell from the ws 300 level forAG/East to ws 85 in three weeks. A slight spike to the midws100's in February brought some relief. One could say thatthe writing was on the wall as the number of VLCC fixturesex AG shrank from the 120's in the 4th to the very low 100'sof the first quarter. This reduced off-take caused an erosionof rates to the WS 80/90 level which closed out the quarter.The Atlantic VLCC market experienced less volatility withrates falling from the WS 200 level to WS 100 as the yearstarted. The Atlantic hasn't seen the wide swings in freightas it moves in a much narrower band, with the raw numberstrading between WS 85 and WS 130.

As we look forward, the additional capac-ity coming to the market at more than twovessels a month for the year has not beenabsorbed as growth in ton miles slowedand there was minimal scrapping, makingany improvement in rates doubtful for thenear term. One has to look out to the endof the 3rd qtr before any meaningfulimprovement may be expected as sea-sonal stock building takes place. Withhigh bunker cost eating into returns, it’sunderstandable that some owners aretaking advantage of high asset valuesand selling tonnage at very firm numbers.

Suezmax Sector:

The Suezmax sector enjoyed strong /steady earnings in the first quarter of2005 with average TCE’s of about

$50,000 p/d. With the weather not playing the same part itdid in the Black Sea trade this year the 2004 rate spike fromthe Black Sea didn’t materialize, limiting delays to around10 days versus the 25-30 days of 2004. This spilled overinto West Africa and acted as a stabilizing influence, remov-ing much of the previous quarters volatility and West Africarates shuttled between WS 160 and 190. With more sweetcrude destined for China, an alternate trade for VLCC’s, car-gos for the U.S. were primarily left to Suexmax tonnage.

The prospects for the year remain guarded as 2nd quarterrefinery turnarounds will slow the pace of activity and rateswill reflect this softness. The addition of 9 units so far thisyear and further 17 scheduled to be delivered in 2005 (this

15



2005 First Quarter Average Earnings

0

10,000

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2005-01 2005-02 2005-03 2005-04

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Reported Delivery Schedule Basis End May 2005

0

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70

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Remainder of 2005 through 2008

No

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f V

essels

VLCC Suezmax Aframax Panamax Products

includes 1 shuttle tanker) with what would look to be a verysoft sector scrapping figure, only two units scrapped so farthis year. This may serve to hold down any 3rd and 4thquarter rate run up.

The start up of the BTC pipeline for an additional 400,000b/d of Med export in the 4th quarter as well as increasedBaltic exports will help to absorb the new ice class tonnage.The mid east trades continue to operate in parallel to theVLCC sector with volatility always present.

It is interesting to note a return to period interest with char-terers willing to take tonnage for long periods reflecting theirbelief in this sector.2005 Reported Suezmax Period Charters Over 12 Months:

Vessel Built Period

Monte Granada 2004 12 monthsFour Sun 2003 33 monthsFlawless 1991 3 yearsTimeless 1991 3 yearsFaultless 1992 5 yearsSacramento 1998 7 yearsSabine 1998 7 yearsSpetses 1996 7 yearsSea Star 1996 7 years

Aframax Sector:

Since the start of 2005 Aframax’s have experienced dra-matic swings in WS rate levels in the Caribbean. SinceJanuary the inter-month low to high has been approximate-ly 90 points, but, nonetheless, the average remains in-excess of WS 200 which equates to more than $35,000 perday time charter equivalent. Thus owners are not findingthis market’s volatility too painful.

The inter-UKC market, after coming off the winter highs hasbeen trading in a narrow band between WS 140 and WS175 with little sign of change.

The cross-Med market has witnessed by far the most vio-lent swings, super highs approaching WS 300 and stagger-ing lows nearing WS 100.

We believe that there will not be much of a change as wehead into the second half of the year.

Panamax Sector:

The Caribbean Panamax market has been anything but pre-dictable. January was strong with an average WS rate of380 for double hulled vessels trading CBS/USAC-G and WS267 for non-double hulls. February saw rates drop almost

150 WS points for double hulls and WS 90 for others. Marchsaw the market jump back up to an average of WS 268 andWS 223 respectively. April, May and June have followed thesame see-saw pattern.

Despite these fluctuations the market as a whole hasremained resilient, be it CBS/USAC, CONT/STATES,WAFR/STATES or Brazil up. Just when one thinks the bot-tom is about to fall out, one of the four load areas has cometo the rescue. While the Aframax market has had someaffect dampening or pushing depending on the marketcycle, for all intents and purposes the Panamax market hasbeen making its own way on its own merits.

With PDVSA banning all single hull and probably doublesided and double vessels to follow, we could be in for aninteresting next few months.

CPP Sector:

The Atlantic basin clean market has clearly softened overthe course of the year, to some degree as the domesticcrude and product inventory levels have increased. Whilerates during the first quarter of 2005 upcoast averagedabout 38 x WS 290, and Cont/States averaged about 37 xWS 314.25, we have seen consistent softening during Mayand June in both markets.

Freight rates during the first quarter of 2005 certainly sawsome benefit from the changing inventory paradigm, movingfrom the low inventories of the first 2 or 3 quarters of 2004,to the high inventories we have domestically today, coupledwith the usual seasonal strength seen during the wintermonths and the buildup for the summer driving season.Gasoline inventories today are in the upper half of the aver-age range and distillate inventories in the lower half of theaverage range. Certainly such levels have some impact ontransportation demand.

Going forward, as we move farther into what is traditionallya softer summer season for freight rates, we should expectthe markets to soften.

However, taking into account the expected demand increas-es for refined product over 2005, and in particular potentialrefining bottlenecks as we move into the fourth quarter orheating oil season, there is good reason to expect that cleanmarkets will see their usual fourth quarter rebound.

16



The Actual VLCC Trading Fleet

Ship_name Dwt Blt Hull Sbt F'cast Scrap

1979Folk Sun 323100 1979 SH N 2005

1980Petrobras 50 279688 1980 SH 2005Belokamenka 360700 1980 SH Y 2007

1981Apollo 257882 1981 SH Y 2007Chang Yun 224738 1981 SH Y 2007Folk Moon 360700 1981 SH Y 2007

1982Kazimah 290085 1982 SH Y 2008

1983Folk Sea 322912 1983 SH N 2005Al Funtas 294739 1983 SH Y 2009Settebello 322446 1983 SH Y 2009

1984Eleuthera 255987 1984 SH Y 2010

1985Apollo Sun 259995 1985 SH Y 2010

1986B Elephant 239351 1986 SH Y 2010Bright Jewel 264148 1986 SH Y 2010Hebei Explorer 248965 1986 SH Y 2010

S/R Mediterranean 214861 1986 SH Y 2010Shoju Maru 258034 1986 SH Y 2010Titan Libra 265551 1986 SH Y 2010Titan Venus 250267 1986 SH Y 2010Vl Chios 239783 1986 SH Y 2010

1987A Elephant 264758 1987 SH Y 2010Aegiali 254601 1987 SH Y 2010C Elephant 250079 1987 SH 2010S/R Long Beach 214862 1987 SH Y 2010Takamatsu Maru 264631 1987 SH Y 2010Titan Gemini 261068 1987 SH Y 2010

1988C. Concord 276052 1988 SH Y 2010Europe 255087 1988 SH Y 2010Island Accord 255271 1988 SH Y 2010Island Bauhinia 255346 1988 SH Y 2010Kolossi 248049 1988 SH Y 2010Shinyo Jubilee 240401 1988 SH 2010Tinos 260039 1988 SH Y 2010Titan Leo 245653 1988 SH Y 2010Titan Neptune 265322 1988 SH Y 2010World Prelude 265243 1988 SH Y 2010

1989Clovely 248034 1989 DB Y 2014Albatross 255087 1989 SH Y 2010Astro Lupus 238500 1989 SH Y 2010Brilliant Jewel 247471 1989 SH Y 2010Dorado 304622 1989 SH Y 2010Eastern Fortune 277020 1989 SH Y 2010Eastern Jewel 258049 1989 SH Y 2010Episkopi 265316 1989 SH Y 2010F Elephant 275984 1989 SH Y 2010Halden 277020 1989 SH Y 2010Lysaker 276210 1989 SH Y 2010Navarin 276736 1989 SH Y 2010

17


CHARLES R. WEBER TANKER REPORT VLCC FLEET:06

1 2 31

31 1

86

10

15

12

19

24

21

17

13

1

2

4

14

313

23

9

14

30

41

27

38 37

30

12

0

5

10

15

20

25

30

35

40

45

1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Single Double Bottom Double Sides Double hull

VLCC Actual Trading Fleet as of May 2005

Protaras 255028 1989 SH Y 2010Star II 304622 1989 SH Y 2010Verona TBRN 258076 1989 SH Y 2010Vl Malibu 248976 1989 SH Y 2010

1990Azuma Enterprise 255226 1990 SH Y 2010Dynamic City 244651 1990 SH Y 2010Front Sabang 285715 1990 SH Y 2010Geilo 243272 1990 SH Y 2010Grand Atlantic 275269 1990 SH Y 2010Grand Explorer 285768 1990 SH Y 2010Grand King 285690 1990 SH Y 2010Hebei Ambition 285640 1990 SH Y 2010Lania 248050 1990 SH Y 2010Orpheus Asia 274990 1990 SH Y 2010Taos 275993 1990 SH Y 2010Vasant J Sheth 261167 1990 SH Y 2010

1991Agios Nikolaos III 281751 1991 SH Y 2010Al Awdah 284533 1991 SH Y 2010Falkonera 264892 1991 SH Y 2010Front Highness 284317 1991 SH Y 2010Front Lady 284487 1991 SH Y 2010Front Lord 284497 1991 SH Y 2010Front Vanadis 285873 1991 SH Y 2010Grand Lady 281794 1991 SH Y 2010Kaimon 261155 1991 SH Y 2010Nichiryu 249037 1991 SH Y 2010Nile 285739 1991 SH Y 2010Orient Jewel 275628 1991 SH Y 2010Shinyo Alliance 248034 1991 SH Y 2010Shinyo Mariner 271208 1991 SH Y 2010Sunrise Iv 259530 1991 SH Y 2010Sunrise V 264164 1991 SH Y 2010Tohdoh 261212 1991 SH Y 2010Welsh Venture 280000 1991 SH Y 2010Yahiko Maru 259490 1991 SH Y 2010

1992Radiant Jewel 302149 1992 DS Y 2015Sunrise Jewel 302440 1992 DS Y 2015A H Bhiwandiwalla 264301 1992 SH N 2005Al Samidoon 284889 1992 SH Y 2010Al Shuhadaa 285117 1992 SH Y 2010Al Tahreer 284532 1992 SH Y 2010Antiparos 269065 1992 SH Y 2010Asian Jewel 264484 1992 SH Y 2010Astro Leon 285767 1992 SH Y 2010Astro Libra 285771 1992 SH Y 2010Bright Artemis 261284 1992 SH Y 2010Front Duke 284480 1992 SH Y 2010Kanayama 258094 1992 SH Y 2010New Valor 281598 1992 SH Y 2010New Venture 291640 1992 SH Y 2010Nichiwa 249107 1992 SH Y 2010Noto 286006 1992 SH Y 2010Nuri 285933 1992 SH Y 2010Oriental Venture 281018 1992 SH Y 2010Orpheus Orchid 258080 1992 SH Y 2010Pacific Beauty 258096 1992 SH Y 2010Pacific Courage 269101 1992 SH Y 2010Shinyo Clipper 243870 1992 SH Y 2010Suzuka 269581 1992 SH Y 2010Titan Uranus 254351 1992 SH Y 2010Tohzan 255396 1992 SH Y 2010

1993Arosa 291381 1993 DH YChios 301824 1993 DH YCrude Guardian 290927 1993 DH YEagle 284493 1993 DH YFolk Star 299999 1993 DH YLa Esperanza 299700 1993 DH YLa Prudencia 298900 1993 DH YNew Wisdom 298033 1993 DH YOlympic Loyalty 303184 1993 DH YSavoie 306430 1993 DH YSebu 293239 1993 DH Y

Shinyo Landes 306474 1993 DH YSoro 299718 1993 DH YUniversal Hope 299700 1993 DH YEdinburgh 302493 1993 DS Y 2015New Vitality 290691 1993 DS Y 2015Starlight Jewel 306902 1993 DS Y 2015Yiomaral 302432 1993 DS Y 2015Able Dolphin 264512 1993 SH Y 2010Front Ace 275546 1993 SH Y 2010Front Duchess 284480 1993 SH Y 2010Front Tobago 259992 1993 SH Y 2010Grand Mountain 260995 1993 SH Y 2010Hebei Spirit 269605 1993 SH Y 2010Libra Star 291435 1993 SH Y 2010New Victory 291613 1993 SH Y 2010Okinoshima Maru 262945 1993 SH Y 2010Pacific Ruby 260988 1993 SH Y 2010Phoenix Star 291435 1993 SH Y 2010Prem Putli 280654 1993 SH Y 2010Sala 279989 1993 SH Y 2010Satsuma 258019 1993 SH Y 2010Shinyo Guardian 259993 1993 SH Y 2010Sunlight Jewel 300364 1993 SH Y 2010Sunrise III 264165 1993 SH Y 2010Suva 293371 1993 SH Y 2010Sylt 293297 1993 SH Y 2010Takayama 259991 1993 SH Y 2010Tataki 244275 1993 SH Y 2010

1994Berge Stadt 306951 1994 DH YLa Madrina 299700 1994 DH YNew Vision 279864 1994 DH YAl Bali Star 291435 1994 SH Y 2010Carina Star 305668 1994 SH Y 2010Dar Yun 262618 1994 SH Y 2010Falcon 265995 1994 SH Y 2010Grand Pacific 263097 1994 SH Y 2010Hamal Star 301550 1994 SH Y 2010Han-Ei 259999 1994 SH Y 2010Hydra Star 305846 1994 SH Y 2010Markab Star 301227 1994 SH Y 2010Mirfak Star 301542 1994 SH Y 2010Orion Star 305783 1994 SH Y 2010Pacific Crystal 264158 1994 SH Y 2010Pacific Superior 269605 1994 SH Y 2010Polaris Star 301569 1994 SH Y 2010Provence 285365 1994 SH Y 2010Shaula Star 301591 1994 SH Y 2010Suhail Star 301862 1994 SH Y 2010

1995Astro Centaurus 299900 1995 DH YAtlantic Liberty 281559 1995 DH YAtlantic Prosperity 310000 1995 DH YC. Trust 281226 1995 DH YCamden 298306 1995 DH YChelsea 298432 1995 DH YDiamond Hope 264340 1995 DH YJupiter Glory 298816 1995 DH YKensington 298306 1995 DH YLa Paz 299700 1995 DH YMayfair 298405 1995 DH YSuper Zearth 265353 1995 DH YUniversal Peace 299700 1995 DH YAlphard Star 301858 1995 SH Y 2010Astro Luna 264340 1995 SH Y 2010Astro Lyra 284410 1995 SH Y 2010C Navigator 277798 1995 SH Y 2010C Planner 278157 1995 SH Y 2010El Junior 258096 1995 SH Y 2010Gemini Star 301862 1995 SH Y 2010Golden Stream 275616 1995 SH Y 2010Hebei Mountain 301665 1995 SH Y 2010Hyundai Star 281199 1995 SH Y 2010Katori 261031 1995 SH Y 2010Navix Azalea 269141 1995 SH Y 2010Pherkad Star 301389 1995 SH Y 2010

1996

18



Bourgogne 296230 1996 DH YCrown Unity 300482 1996 DH YGhawar 300361 1996 DH YHampstead 298306 1996 DH YHawtah 300361 1996 DH YIran Nabi 298731 1996 DH YIran Najm 298731 1996 DH YIran Nesa 298731 1996 DH YIran Noah 298731 1996 DH YIran Noor 298732 1996 DH YMajestic Unity 300549 1996 DH YNavix Astral 275644 1996 DH YOhminesan 267812 1996 DH YOlympic Legacy 302789 1996 DH YOs Arcadia 298960 1996 DH YOs Concord 301345 1996 DH YRamlah 300361 1996 DH YRaven 301653 1996 DH YSovereign Unity 309892 1996 DH YT. M. Harmony 264992 1996 DH YTajima 265539 1996 DH YWatban 300361 1996 DH YHyundai Banner 281074 1996 SH Y 2010

1997C Bright 309636 1997 DH YCourtenay Bay 300955 1997 DH YEquatorial Lion 300349 1997 DH YMeridian Lion 300349 1997 DH YRegal Unity 309966 1997 DH YSafaniyah 300361 1997 DH YTantramar 300955 1997 DH YUniversal Brave 299997 1997 DH YUniversal Prime 299985 1997 DH Y

1998Al Salheia 310453 1998 DH YAl Shegaya 310513 1998 DH YAntares Voyager 309995 1998 DH YFront Century 311189 1998 DH YFront Champion 311286 1998 DH YFront Vanguard 300058 1998 DH YFront Vista 300149 1998 DH YHyundai Sun 301178 1998 DH YMillennium 301171 1998 DH YNeptune Glory 299127 1998 DH YOrion Trader 259997 1998 DH YSaturn Glory 272700 1998 DH YTakachiho II 280889 1998 DH YTi Creation 298324 1998 DH Y

1999Algarve 298969 1999 DH YAlrehab 301620 1999 DH YAscona 299198 1999 DH YAshna 301438 1999 DH YAstro Callisto 299167 1999 DH YBritish Pioneer 306397 1999 DH YChristina 309344 1999 DH YDiamond Jasmine 281050 1999 DH YElisabeth Maersk 307190 1999 DH YEmilie Maersk 308571 1999 DH YFront Chief 311224 1999 DH YFront Comanche 300133 1999 DH YFront Commander 311168 1999 DH YFront Crown 311168 1999 DH YGemini Voyager 310138 1999 DH YGolden Victory 300155 1999 DH YKou-Ei 279999 1999 DH YLuxembourg 299150 1999 DH YNichihiko 281705 1999 DH YOcana 300144 1999 DH YOmala 306009 1999 DH YOpalia 302193 1999 DH YOsprey 284893 1999 DH YPacific Lagoon 305839 1999 DH YPhoenix Voyager 310137 1999 DH YRyuho Maru 281050 1999 DH YTakasago Maru 281050 1999 DH YTakase 259993 1999 DH Y

Tenryu 281050 1999 DH YTokachi 280973 1999 DH Y

2000A. I. Angelicoussis 306085 2000 DH YAsian Progress II 314026 2000 DH YBandaisan 281037 2000 DH YBritish Pride 305994 2000 DH YBritish Progress 306397 2000 DH YBritish Purpose 306307 2000 DH YC. Dream 298570 2000 DH YEffie Maersk 307190 2000 DH YEli Maersk 259999 2000 DH YEllen Maersk 308491 2000 DH YElse Maersk 308491 2000 DH YFront Commodore 298620 2000 DH YFront Tina 298824 2000 DH YHawk 306324 2000 DH YIbukisan 299999 2000 DH YIkomasan 299986 2000 DH YKestrel 306278 2000 DH YLucky Trader 298677 2000 DH YM. A. Angelicoussis 300000 2000 DH YMaritime Jewel 299364 2000 DH YMars Glory 299089 2000 DH YNamur 298552 2000 DH YNordmillennium 301429 2000 DH YNysa 299543 2000 DH YOscilla 302561 2000 DH YOverseas Donna 309498 2000 DH YPatris 298543 2000 DH YRaphael 308700 2000 DH YRegulus Voyager 310138 2000 DH YRyuohsan 281050 2000 DH YSanko Unity 298920 2000 DH YTakasuzu 279989 2000 DH YTenyo 281050 2000 DH YTenzan 281050 2000 DH YTitan Glory 308491 2000 DH YUbud 279999 2000 DH YUlan 299325 2000 DH YUral 279999 2000 DH YVenus Glory 299089 2000 DH YWashusan 281050 2000 DH YYohteisan 281050 2000 DH Y

2001Antonis 309371 2001 DH YAriake 298530 2001 DH YArion 309459 2001 DH YArtois 298330 2001 DH YAstipalaia 305965 2001 DH YAstro Castor 306344 2001 DH YAstro Chorus 305704 2001 DH YAstro Cygnus 306344 2001 DH YFamenne 298412 2001 DH YFormosapetro Ace 281395 2001 DH YFormosa. Challenger 281395 2001 DH YFormosa. Discovery 281434 2001 DH YHarad 303115 2001 DH YKos 305870 2001 DH YKumanogawa 299988 2001 DH YMercury Glory 298990 2001 DH YMogamigawa 299999 2001 DH YOverseas Ann 309327 2001 DH YOverseas Chris 308700 2001 DH YPluto Glory 298911 2001 DH YSakura I 296000 2001 DH YSarah Glory 298628 2001 DH YShinyo Kannika 281395 2001 DH YStena Victory 312638 2001 DH YStena Vision 312679 2001 DH YUtah 299498 2001 DH YUtik 299450 2001 DH Y

2002Abqaiq 302986 2002 DH YAmantea 309287 2002 DH YAstro Challenge 299222 2002 DH YBritanis 304732 2002 DH Y

19



Charles Eddie 305460 2002 DH YCosgreat Lake 298833 2002 DH YCrude Crest 300000 2002 DH YCrude Progress 300000 2002 DH YCrude Topaz 319430 2002 DH YEagle Vermont 306999 2002 DH YEagle Virginia 306999 2002 DH YFront Eagle 309064 2002 DH YFront Falcon 308875 2002 DH YFront Page 299164 2002 DH YFront Serenade 299152 2002 DH YFront Stratus 299157 2002 DH YIran Delvar 299500 2002 DH YIran Hormoz 299261 2002 DH YIran Huwayzeh 299242 2002 DH YKaimon II 314014 2002 DH YKoho I 301045 2002 DH YLeo Star 316501 2002 DH YMarjan 302977 2002 DH YNeptune 319360 2002 DH YNichinori 298414 2002 DH YNippon 298399 2002 DH YOtina 298465 2002 DH YOverseas Mulan 319029 2002 DH YPisces Star 316808 2002 DH YSafwa 303138 2002 DH YSky Wing 299997 2002 DH YTaizan 300405 2002 DH YTanabe 298561 2002 DH YTateyama 300373 2002 DH YTi Africa 441893 2002 DH YTi Asia 441893 2002 DH YTi Europe 441893 2002 DH YTsurusaki 300838 2002 DH Y

2003Apollonia 308200 2003 DH YAries Star 316476 2003 DH YAstro Carina 306314 2003 DH YAstro Corona 305870 2003 DH YAustralis 299095 2003 DH YBunga Kasturi 298100 2003 DH YC. Champion 317614 2003 DH YCapricorn Star 316507 2003 DH YCosbright Lake 299079 2003 DH YCosglory Lake 299145 2003 DH YCrude Sun 309233 2003 DH YCrudestar 318692 2003 DH YEneos Breeze 301013 2003 DH YIran Damavand 299500 2003 DH YIran Daylam 299500 2003 DH YIran Hamoon 279400 2003 DH YIran Harsin 299229 2003 DH YIran Hengam 299214 2003 DH YIwatesan 300667 2003 DH YKaminesan 303896 2003 DH YNordenergy 319174 2003 DH YNordpower 319012 2003 DH YOlympic Legend 308500 2003 DH YOlympic Liberty 304992 2003 DH YOverseas Rosalyn 317972 2003 DH YPerseus Trader 299992 2003 DH YRokkosan 300257 2003 DH YSamco America 304996 2003 DH YSamco Asia 305000 2003 DH YSea Fortune 299097 2003 DH YSelene Trader 299991 2003 DH YTi Oceania 441585 2003 DH YTsurumi 300838 2003 DH YVega Trader 299985 2003 DH YVenture Spirit 298287 2003 DH YWorld Luck 298717 2003 DH YWorld Luna 298555 2003 DH Y

2004Ardenne Venture 318000 2004 DH YAsian Progress III 306352 2004 DH YC. Emperor 317650 2004 DH YC. Vision 317614 2004 DH YEagle Vienna 306999 2004 DH Y

E. I. Angelicoussi 306229 2004 DH YEneos Tokyo 300976 2004 DH YErha Fpso 368000 2004 DH YFlandre 305704 2004 DH YFormosapetro Empire 299170 2004 DH YFujikawa 299984 2004 DH YIran Darab 299500 2004 DH YIran Dena 299500 2004 DH YIrene Sl 319247 2004 DH YIsuzugawa 299984 2004 DH YKai-Ei 299997 2004 DH YNew Century 299031 2004 DH YNichioh 303994 2004 DH YNissho Maru 300544 2004 DH YOriental Jade 306352 2004 DH YSea Energy 305318 2004 DH YSea Force 305442 2004 DH YStarlight Venture 317970 2004 DH YTaga 303430 2004 DH YTakamine 306206 2004 DH YToba 299980 2004 DH YWorld Lake 298564 2004 DH YWorld Lion 298563 2004 DH YXin Jin Yang 297376 2004 DH YYounara Glory 320050 2004 DH Y

2005Xin Ning Yang 298000 2005 DH YAquarius Wing 300500 2005 DH YBunga Kasturi Dua 300542 2005 DH YTokio 306206 2005 DH YEagle Valencia 306999 2005 DH YToyo 310309 2005 DH YDesh Ujaala 316217 2005 DH YChrysanthemum 318000 2005 DH YAthina 318658 2005 DH YSeaking 318669 2005 DH YSpyros 319000 2005 DH YAndromeda Voyager 320472 2005 DH Y

20



Charles R. Weber Company, Inc. is one of the oldest andlargest ship brokerage firms in the United States.Established in 1940, the company is an independent full-service shipbroker and marine consultant.

Based in Greenwich, Connecticut, Charles R. Weber offersa broad range of maritime brokerage and consulting servic-es to international marine, trading and financial clientsworldwide.

From tanker voyage charter, bare boat, and time charter tosale and purchase of all vessel types and marine projects inthe tanker, off shore and specialist sectors of the market.

Charles R. Weber with their broad and diverse global part-nerships are able to develop marine projects, whatever theirsize or complexity, from concept to completion, providingtheir clients with over fifty years of maritime experience andexpertise in all sectors of the marine industry.

After reading our quarterly If you would like further information orbespoke market analysis we would be happy to discuss yourneeds. Please feel free to contact us:

E-mail: [email protected]

Voice: (1) 203-629-2300 Facsimile: (1) 203-629-9101 Telex: 179100 WEBTANK CT

Or contact us by mail:

Marine Projects Charles R. Weber Company Inc. Greenwich Office Park One Greenwich, Connecticut 06831 United States of America

21


CHARLES R. WEBER TANKER REPORT CONTACT RESEARCH:07

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