LONDON – Booming international trade and strong global oil and gas demand will underpin seaborne freight prices for years to come, the head of one of Greece’s biggest shipowning families said in an interview. Nikolas Tsakos, president and CEO of Tsakos Energy Navigation, the oil arm of the larger Tsakos Greek shipping empire, said it had been a «fantastic» 12 months for shipping crude and petroleum products. Returns on shipping other commodities, such as iron ore, coal and container trade had also been exceptional, he said. «The (freight) market goes from strength to strength because China keeps on swallowing stuff and it makes it very exciting for all of us,» he told Reuters. «Merchant shipping has never seen it so good in 30 years.» It has been a year of superlatives for the maritime industry and freight markets. After years of operating near break-even levels, 2004 saw the Baltic Exchange’s dry freight index smash records twice over on booming seaborne trade into China. Oil or «wet» freight also broke records late last year on vaulting Asian demand and the highest oil-demand growth in a generation. «It’s one of the few times in recent history both sectors – wet and dry – peaked together,» Tsakos said. He attributed the boom to the «true» globalization of international trade in the last 15 years with the emergence of FSU countries and China and India onto the world stage. Oil freight firm to 2008 Tsakos expects oil freight earnings to remain strong well into the decade, citing high oil and gas demand projections and a shrinking world fleet. Under strict UN environmental laws, about 40 percent of the world fleet faces the scrap heap in the next five years, as more double-hulled tonnage becomes the norm. «And that’s why the (freight) market is going to be relatively good – at least double our break-even price until 2008,» he said. «What has really killed the business in the past has been an oversupply of ships and that isn’t likely to happen soon.» Tsakos Energy Navigation aims to capitalize on the solid forecasts by acquiring another 14 new oil and gas tankers that will join the existing 27-strong fleet between 2005 and 2007. It has also invested heavily in LNG carriers and what are known as ice-class ships, specialized tankers that can navigate the frozen shipping lanes in the Baltic during the winter months. Ice-class freight fees are far steeper than those charged by conventional tankers, and Tsakos has noted that Russia intends to keep bolstering exports from Baltic seaports like Primorsk. LNG is also seen as a key growth sector, with only 160 LNG carriers out of the 3,000-strong oil tanker fleet expected to cope with surging demand growth. If there’s one area of the business Tsakos is less than happy with it’s his company’s share price to earnings ratio. «There are lots of far riskier businesses, such as offshore drilling, where the ratios are 33 times greater than earnings.» «As a company, we have never had a down quarter in 45 quarters and we are still only valued at six times our earnings, which is ridiculously low,» he said.