Estimation on Oil Tanker Fleet Capacity in Korea's Crude Oil Market

This paper aims to investigate if the number of oil tankers available for Korea to utilize in 2009, 822 vessels with 6.74 million GT, will be enough to meet Korea's transportation demand for future crude oil import. A time serious econometric model is developed and applied to a set of annual data series covering the 1980-2009 period. Based upon the long run elasticity of tanker demand and the projected future crude oil demand for Korea until 2030, this paper implicates that seriously excessive tanker fleet capacity will be generated in Korea for at least a short to medium term until 2015, which will exert a downward pressure on Korea's already depressed freight rate.