Introduction and Overview

The energy industry is among the most dynamic and demanding in our global economy. Seaborne crude oil transportation plays an essential role in the industry, providing the most economic and flexible way to transport energy in bulk from its upstream points of production to downstream points of refining and consumption. Currently more than two-thirds of oil consumed globally is transported from producers to consumers via a fleet of nearly 3000 ocean going tankers. Unlike the upstream and downstream segments of the industry, which are dominated by large corporations and state owned entities, the vast majority of shipping is conducted by small independent ship-owners. The main clients of tanker companies include oil companies, oil traders, large oil consumers, petroleum product producers, and government agencies.

The tanker industry has undergone a dynamic evolution sinces its inception over a century ago. However, many of the industry’s fundamentals remain unchanged. The pricing of crude oil transportation services is determined in a highly competitive tanker charter market. The contracts by which crude oil is transported include spot charters, time charters, and "bareboat" charters. A broker is traditionally involved in transactions, acting as an intermediary between vessels owners and charterers. The major hubs of shipping are located in New York, London, Oslo, Singapore, and Tokyo.

The shipping industry is heavily regulated due to its global nature and the inherent risks of transporting large cargoes across the world’s oceans. The International Maritime Organization, a specialized agency within the United Nations, maintains a comprehensive regulatory shipping framework for safety, environmental concerns, legal matters, technical co-operation, maritime security, and the efficiency of shipping. In recent years, safety and quality standards of the seaborne transportation of crude oil and petroleum products have been raised significantly with the passage of stricter international regulations. The result has been increasing standards of safety and professionalism, environmental responsibility, and increasing consolidation by large, public companies. One of the more recent regulations that will substantially alter the industry is the 2010 International Maritime Organization’s ban on single hulled tankers. The IMO ban has been affrimed by 151 countries, although single hull vessels may continue to operate until 2015 with the permission of the importing and exporting countries and under stricter quality, structural, and reliability standards. However, a growing group of nations including the European Union, Australia, Korea, and the Philippines have already indicated they will adhere to the IMO ban denying single hull tankers access to their ports. General Maritime, illustrated by our 100% double hulled fleet, supports the IMO deadline and the removal of single hulled tankers from the world’s fleet to prevent further oil spills and limit environmental risk.