Frontline Ltd., the world’s largest oil tanker shipping company, has reported unaudited results for the three and six months ended June 30, 2019.

So far in 2019, 41 VLCCs have been added to the global fleet compared to three vessel demolitions.

An additional 33 VLCCs are scheduled to be delivered in 2019 with 43 more to follow in 2020 before the order-book declines sharply.

It is important to note that both the VLCC and Suezmax tanker order book as a percentage of the total fleet are at the lowest levels seen in over 20 years.

The order book has been the biggest challenge for the tanker markets over the last 24 months. The removal of this overhang is positive, but a surge in new orders can of course quickly change this.

Despite continued deliveries of newbuilding vessels in the short term, effective crude tanker capacity growth is expected to slow as vessels are taken out of service for regular dockings, scrubber or ballast water installation and preparation of vessel fuel tanks for the IMO 2020 regulations.

While the pace of recycling has slowed significantly compared to last year, there are still 170 VLCCs that are greater than 15 years of age.

“We believe a large number of older vessels will be taken out of the market and either be recycled or repurposed for floating storage as part of a regulation-driven phasing out of older vessels,” said the tanker company.

The growth of the crude oil tanker fleet remains a key factor for the tanker market, it said.

The second quarter of 2019 saw the largest year on year decline in global refinery throughput in the last decade due to extended maintenance ahead of IMO 2020.

Refineries are now restoring capacity, throughput is rebounding swiftly and the second half of 2019 is expected to see about 2 million barrels per day in refining capacity on stream in Asia compared to the first half of the 2019.

Crude oil demand forecasts remain healthy, although the IEA’s growth forecast for 2019 and 2020 have been reduced to 1.1 and 1.3 million barrels per day.

“For the balance of 2019, we expect the market to remain volatile due to crude oil supply concerns and geopolitical tensions, but continue to trend higher as crude oil volumes return,” Frontline said.

Exports from the Atlantic basin will continue to grow, driven primarily by increasing U.S. production, which is forecasted to grow by 1.4 and 0.9 million barrels per day in 2019 and 2020, respectively. A large portion of incremental production is flowing to Asia, supporting strong growth in tonne-mile demand.