An increasing number of very large crude carrier newbuildings are being hired to store clean petroleum products (CPP) as an alternative to land-based tankage.

VLCCs and suezmax tankers are being chartered straight from the delivery yards before ever taking a crude cargo, brokers said.

"Oil demand has been so flabby in recent months, the refiners have already run the crude and are stuck with the product," said SSY research director Mark Jenkins.

With product storage facilities reaching bursting point, refiners have taken advantage of low crude tanker rates, particularly for very large crude carriers.

"[Due to] the crash in charter rates over the last couple of months, suddenly CPP storage is an economical alternative [for refiners] than to try and hunt out any land-based tankage that might be available," Mr Jenkins said.

VLCCs and suezmaxes have already been chartered by traders to benefit from the crude oil contango, where oil is bought at a low price, stored for three to six months and then sold on to make a profit later when the oil price has risen.

This had already removed about 70 VLCCs from the spot market, but this number could be on the rise now as more refiners look to store clean products as an oil product contango develops.

"The same thing has now applied in the last two months to the clean petroleum products market and there are a large number of ships on storage in CPP including brand new VLCCs," said ACM Shipping chief executive Johnny Plumbe.

The London-based shipbroking house had fixed a number of VLCCs coming out of shipyards into CPP storage, despite oil product cargoes normally being shipped on smaller tanker sizes.

Storing petroleum products was a viable alternative to releasing new ships onto the market, where an oversupply of tonnage has already seen tanker rates drop to record lows.

The news of VLCCs storing products came at the same time as SSY reported that there has been little slowdown in the number of tankers being delivered into the fleet this year.

"In the first five months of the 2009, the delivery schedule for some sectors of the tanker fleet was particularly robust," said the broker's monthly research report.

"By the end of May, 29 VLCCs had been delivered, or 45% of the total number due this year. Similarly for aframaxes, 46% of scheduled 2009 newbuildings had been delivered, ie 49 vesssels out the total 106 due for the year."

The only vessel size that had not seen a steady pace of deliveries was the suezmax sector, SSY said.

Only 15 vessels out of a total 61 scheduled had been delivered so far this year, with the primary reason for the delays being problems with one of the Chinese shipyards that are contracted to build a number of the tankers in this size range, the report stated.

By contrast, a very high proportion of the rest of the tanker oderbook is being built at well-established yards in South Korea and Japan, where no noteworthy delays are likely to arise.