The abundance of big tankers, the so-called very large crude carriers (VLCCs) of some 300,000 deadweight tons, makes several analysts express reservations about the projected revenues of the category this year. In 2005 the revenues of VLCCs dropped by 40 percent compared with the «golden» year 2004 when a lack of vessels and the great increase in demand pushed freight rates to extremely high levels. Martin Stopford, Clarkson’s head of research, recently told the industry publication TradeWinds that in the first half of the new year it expects the current trend to continue and forecasts an additional decline of profits by 30 percent for the entire year. However, this decline does not seem to create any particular problems for shipowners. The average daily chartering rate for VLCCs came to $55,000 in 2005, while according to Stopford’s forecast it will not exceed $37,000 this year. Even this amount will not deter shipowners as it still allows them to make significant profits. So what is causing the pessimism? The main argument centers around the significant rise in the supply of new ships in this section of the market and the reduction of exporting activity, mainly from Russia. Shipowners disagree with this view, however; they are avoiding – at least in public – making any sort of forecast about the future of the shipping market. Nevertheless many shipowners tell TradeWinds that 2006 will be similar to 2005, with the daily rate ranging from $50,000 to $70,000. Such amounts do allow for high corporate profits. Furthermore, there are some positive factors such as the good prospects of the big economies of the US, Europe and Japan, combined with the continuing growth of China. Yet nobody can predict the impact of unforeseeable events such as the hurricanes that hit the US in 2005. At present, there are but a few chartering deals for VLCCs, as shipowners are not willing to allow prices to drop, while the market is not risking chartering with the current prices, waiting for them to fall. According to shipping companies, there could be problems after the ships are delivered from the shipyards in the second quarter of 2007, having been chartered in 2005 at rates of $120-130 million. The question is where the market will be at that time, since if it should decline significantly then investment in those vessels may not offer sufficient returns. VLCCs are among the most expensive ships in the market. The cost of constructing such a tanker reached $128-130 million last year, but has now fallen to $118-120 million. TradeWinds has stated that Kristen Navigation of Yiannis Angelikousis paid $120 million for the purchase (in fact, resale) from Tai Chong Cheang of a VLCC under construction ordered at the Daewoo Shipbuilding shipyards to be delivered next year. However, as analysts point out, only a few shipowners appear willing to invest in new orders for the construction of VLCCs at today’s price levels. On the positive side, shipowners are generally optimistic about the market, as daily rates for VLCCs carrying oil from the Middle East and from West Africa come to at least $100,000. This is attributed to the market’s seasonal character, because when the summer demand for oil was less, the rates had fallen. Since the autumn, though, when demand again increased with the coming winter, optimism returned.