Saudi Arabia’s flagship line Bahri has snapped up nine very large crude carriers from Evangelos Marinakis-controlled Capital Maritime & Trading. The company said in a Tadawul filing it would be paying about $1bn in total for the scrubber-fitted ships delivering by the end of the first quarter of 2025. The deal will be financed by bank borrowings and cash on hand.
Bahri has been actively renewing its VLCC fleet since late last year by taking a number of modern ships on the secondhand market, including four VLCCs from Korea Line Corporation in May. The latest move is expected to modernise the company’s oil shipping fleet, which currently stands at 40 VLCCs, and enable phasing out older vessels. The majority of the nine unnamed vessels were built in South Korea and average 5.9 years and about 311,500 dwt.
“The transaction will significantly advance Bahri’s fleet modernization plans, reinforcing its position among leading VLCC owners globally,” the company said, adding that it would also bolster Bahri’s overall fleet competitiveness and lead to higher earnings and reduced operating expenses.
The sale for the Greek owner follows orders for six LNG dual-fuel VLCCs in China earlier this year at $140m each with deliveries set for 2026 and 2027.
Bahri's Fleet Modernization
Bahri's acquisition of these nine VLCCs marks a significant step in the company's fleet modernization strategy. The move aligns with Bahri's goal to phase out older vessels, enhancing fleet competitiveness and ultimately increasing revenues and profitability. The new additions to the fleet are modern eco-scrubber ships, known for their cost efficiency and reduced operating expenses.
The New VLCCs
The new VLCCs, with an average age of 5.9 years, are constructed in South Korea and feature high energy efficiency and low emission technologies, reducing environmental impact. Each vessel boasts an average deadweight tonnage (DWT) of around 311,500. The transaction involves the delivery of the VLCCs in multiple batches, with all vessels expected to be received by Bahri by the end of the first quarter of 2025.
Financing the Deal
Bahri will pay 10% of the total transaction amount upon signing the purchase agreement, while the remaining 90% is to be paid upon delivery of the vessels. The acquisition will be financed through a combination of banking facilities and internally generated funds.
Bahri's Position in the VLCC Market
Bahri currently operates 40 VLCCs, which gives the company control over approximately 13.4 million deadweight tons (DWT) of oil transport capacity. The new additions will further bolster this capacity, maintaining Bahri's leading position in the crude oil transportation sector. The VLCCs are equipped with advanced cargo flexibility, enabling them to carry up to three different grades of crude or fuel oil simultaneously. This versatility is crucial in a market where logistical efficiency and adaptability are paramount.
Strategic Significance for Saudi Arabia
This deal is strategically significant for Saudi Arabia, the world's largest oil exporter, as it continues to secure and expand its logistical capabilities. Bahri's move to modernize its fleet is designed to maintain its competitive edge in the oil shipping industry. Saudi Arabia continues to be one of the world's largest oil producers and exporters.
Looking Ahead
The acquisition of these nine VLCCs will significantly strengthen Bahri's position in the global VLCC market. The company's fleet modernization strategy is expected to lead to higher earnings and reduced operating expenses, ultimately enhancing its profitability. This transaction is a testament to Saudi Arabia's continued commitment to investing in its oil and gas sector, and to maintaining its leadership in the global energy market.
