Norwegian shipowner Frontline has announced a major fleet renewal initiative aimed at modernising its operations and enhancing fuel efficiency.
The plan includes acquiring new vessels and selling eight of its oldest first-generation ECO Very Large Crude Carriers (VLCCs), built between 2015 and 2016, which will be sold for a total of $831.5mn, the shipowner said in an 8 January announcement.
Following the repayment of existing debt tied to these ships, Frontline expects to generate net cash proceeds of approximately $486mn. The company also expects recording a gain of $217.4mn-$226.7mn in the first quarter of 2026, depending on the delivery dates of each vessel. The transaction remains subject to customary closing conditions in line with industry standards.
At the same time, Frontline has also entered an agreement to purchase nine newbuilding contracts for latest-generation, scrubber-fitted ECO VLCCs from an affiliate of Hemen Holding Limited, its largest shareholder, for approximately $1,224mn.
Six vessels are under construction at Hengli Shipyard and three at Dalian Shipyard, both in China. Seven vessels are expected in 2026 starting in the third quarter, one in the first quarter of 2027, and the final vessel in the second quarter of 2027.
"These two transactions enable Frontline to renew its fleet by replacing 10-year-old first-generation ECO vessels with latest-generation, scrubber-fitted ECO vessels at very firm pricing. This aligns with our strategy of operating one of the most modern, cost- and fuel-efficient fleets in the market," said chief executive of Frontline Management AS, Lars H. Barstad said.
Upon completion of these transactions, Frontline's fleet will comprise 81 vessels, including 42 VLCCs, 21 Suezmax tankers, and 18 LR2/Aframax tankers.
The announcement follows a surge in VLCC tankers sale and purchase activity in recent days. South Korea's Sinokor Merchant Marine purchased seven VLCCs, while Belgian shipowner CMB.Tech had sold six VLCCs.
The Argus-assessed VLCC freight rate on the Mideast Gulf to Asia Pacific route plunged in the second half of December as chartering activity slowed — a typical seasonal trend as market participants take holidays. Between 15 to 31 December, the rate fell by 60pc, from WS126 to WS50. Corresponding Argus-assessed time-charter equivalent earnings slumped by 75.5pc over the same period, from $121,652/d to $29,829/d.
But freight rates have started to recover, following predictions that VLCC demand could stay strong through at least the first half of 2026, driven by supportive geopolitical and regulatory developments.
