Looming Tanker Shortage Tempts Dry Bulk Firm Back Into Wet Bulk Market

The LR2 Pro Alliance, recently bought by Norvic and renamed Nordic Monia. She is the firm's first owned ship (Norvic)

Published Jun 22, 2023 10:54 PM by The Maritime Executive

The booming tanker market is drawing new interest from players of all stripes, including dry bulk-focused operator Norvic Shipping, which has decided that its very first owned ship will be a tanker. 

Norvic is already in the middle of a boom in its core dry bulk business, and has recently expanded with several new regional offices. The New York-based company has always chartered in ships rather than building or buying, and its wet bulk business has been secondary to its bulker operations, but times are changing. Norvic has purchased the Aframax LR2 Pro Alliance from Korean company SK Energy. Renamed Norvic Monia, the vessel is the first that Norvic has ever owned outright. The company says that it will consider buying more tankers as it grows its fleet.

Norvic has its origins in tanker operations, which were its first area of focus when it was founded in 2006. It has maintained a division for tanker operations, but the decision to buy Norvic Monia is a stronger expression of confidence in the market. 
“Going back to our roots and growing the tanker division makes strategic sense given the combination of the ongoing global need for crude oil and finished products and shortage of tonnage in the tanker sector,” said AJ Rahman, Group Chairman and CEO. “Unlike dry bulk, the tanker segment is relatively stable with demand expected to grow faster than supply this year and next. Demand in 2024 for crude tankers will be up 4.5% to 6.5% from 2022, according to BIMCO, while supply is likely to fall 0.6%. Given the lack of a new order book in the tanker segment, we believe the time is now to move into ownership.”

Norvic isn't the only one putting emphasis back into tankers. Tor Olav Troim, the chairman of Golar LNG, started out in wet bulk working for Norwegian shipping magnate John Fredriksen but departed the sector in the 2000s. Tankers are looking good enough now that he has decided to get back in, he told a panel at Marine Money this week. His private company Magni Partners has put in an order for two LNG dual-fuel powered VLCCs. “We have decided to go and get our feet a little bit wet,” he said. “After 15 years of bearishness, I’m getting bullish.”