The dynamics of the oil tanker industry

Abstract

The tanker industry covers all business related with trading tankers in which there are many participants: vessel owners, charterers, shipbuilders, scrappers, consultants, capitalists, brokers, insurers, surveyors, agents, repairing shops, manning companies, and vendors etc. The industry exhibits the characteristics of commoditization driven by price. As the industry is significantly affected by the chartering market, I will herein focus on the chartering market and its movements, in order to better understand the industry. The structure of the market creates recurring cycles and instability. Also, the key elements affecting this market are highly interrelated. Characteristically, long delays of these key elements make the market more uncertain and more volatile. The purpose of this thesis is to study the dynamic of the oil tanker industry, in particular chartering market, using system dynamics methodology. A simulation model will illuminate the following:* Driving forces on the commoditized industry, Nature of the dynamics and structural behaviorsm, Effects of key elements on freight rates