Tankers and LNG carriers

The ship types

• Crude tankers (“dirty” tankers) carry crude oil from producing countries to refineries. The sizes are VLCC, Suezmax and Aframax.
• Product tankers (“clean” tankers) carry petrol, diesel, jet fuel and naphtha from refineries to consumers. The sizes are LR2, LR1 and MR. Large product tankers can also carry crude, but the tanks must be cleaned thoroughly before they take clean cargoes again.
• Chemical tankers have many smaller tanks, often stainless steel, so they can carry several different cargoes at once.
• LNG carriers carry liquefied natural gas in insulated tanks at about −162 °C. The Baltic Exchange reference ship holds 174,000 m³.
• LPG carriers carry propane and butane, refrigerated or under pressure. The largest are called VLGCs; Baltic's reference cargo is 44,000 tonnes.
• Shuttle tankers collect oil from production ships and loading buoys at the fields, holding position with dynamic positioning while loading. Several oil fields on the Norwegian shelf depend on them (norskpetroleum.no).

The cargo sizes and routes for each class are in the table in the guide to the freight market.

How the tanker market links to the oil trade

Oil is produced in one place, refined in another and used in a third. Tankers carry the difference. The Baltic Exchange reference routes show the main flows: TD3C from the Middle East Gulf to China (VLCC), TD22 from the US Gulf to China, TD20 from West Africa to Europe and TD7 within the North Sea (GMB 8.8).

• Tonne-miles. Cargo multiplied by distance is what ties up ships. When Europe buys oil from the US instead of a neighbour, or Asia from the Atlantic instead of the Middle East, more ships are needed.
• Refineries. When refineries close in one region and new ones open in another, product trade gets longer and product tankers get more work.
• Arbitrage. A cargo moves between two markets when the price difference exceeds the freight. High rates can therefore stop trades that would otherwise pay.
• Floating storage. When futures prices are far above today's price (contango), it can pay to buy oil now, store it on a ship and sell it forward. Those ships leave the freight market. See spot, futures and the forward curve.
• Production decisions. When large exporters produce less, there are fewer cargoes to carry, especially for VLCCs.
• Sanctions can split the fleet into two markets. See the guide to AIS, sanctions and the shadow fleet.

The contracts and a worked example

A tanker is hired either for one voyage (voyage charter, paid per tonne or in Worldscale) or for a period (time charter, paid per day). To compare them, the voyage is converted to TCE: freight income minus voyage costs, divided by the number of days the voyage takes, including the ballast leg back. The basics are in the guide to the freight market.

Two terms you meet in the contracts: laytime is the time the charterer has to load and discharge, and demurrage is the compensation the owner receives when it takes longer.

LNG carriers are a market of their own

• The value chain. The gas is liquefied at a plant by the export port, carried by LNG carrier and turned back into gas at an import terminal. Some import terminals are ships moored in port (FSRU, floating storage and regasification unit).
• The tanks. The main types are membrane tanks, built into the hull, and self-supporting tanks such as the spherical Moss tanks. Some of the cargo evaporates on the way (boil-off) and is often used as fuel.
• The contracts. Many LNG carriers are built for and chartered on long contracts to specific projects. The market for short charters and single voyages is smaller, and rates there can swing a lot.
• What moves rates. The price gap between Europe and Asia decides where cargoes from the US sail, and longer voyages tie up more ships. Winter brings higher gas demand. The Baltic Exchange publishes three LNG routes: Gladstone–Tokyo, Sabine Pass–UK and Sabine Pass–Tokyo (GMB 7.09).
• Norway exports LNG from Melkøya, see the guide to gas to Europe.

The players

• Shipowners own and operate the ships. Among the listed companies with their own OESA pages are Frontline (tankers), Hafnia (product tankers) and BW LPG (LPG carriers).
• Charterers are oil companies, refiners and trading houses.
• Shipbrokers match ships and cargoes and report the rates the Baltic indices are built on.
• Classification societies check that ships are built and maintained to the rules, and P&I insurance covers, among other things, liability for oil spills.

See the ships and routes

• The “Freight routes and index weights” layer shows the Baltic routes for tankers, LNG carriers and LPG carriers.
• The “Ships from AIS” layer on the globe shows tankers and LNG carriers in near real time, where OESA has AIS coverage.

Sources

• Baltic Exchange, Guide to Market Benchmarks 8.8 (September 2026), appendix 2 – routes, reference ships and cargo sizes; the LNG routes from edition 7.09
• Worldscale Association
• Liquefied natural gas explained – U.S. Energy Information Administration – temperature and volume
• Exports of Norwegian oil and gas – norskpetroleum.no – shuttle tankers
• UNCTAD: Review of Maritime Transport

The guides are written by OESA students to explain concepts and how things fit together. They are not investment advice. Figures that are not definitions carry a source and a date; if you find an error, let us know at styret@oesa.no.