How Oil Tankers Work

By: Akweli Parker  | 
An oil tanker moves through Alaska's Prince William Sound, site of the infamous Exxon Valdez oil spill in 1989.
David McNew/Getty Images
Key Takeaways
  • Oil tankers are designed to transport large quantities of crude oil and petroleum products across oceans.
  • These tankers play a critical role in the global economy getting oil from production sites to refineries and distribution centers worldwide.
  • Despite their economic importance, oil tankers also pose environmental risks regarding oil spills and pollution.

Soon after entrepreneurs in the 1850s began exploiting crude oil as a source of energy, the nascent oil industry found itself in a dilemma. How were early oil prospectors supposed to transport this "black gold" from the remote locations from whence it sprang, to places where it could be refined, sold and used?

It didn't take long for these early oil barons to come up with a solution. The first oil tankers were built in the 1860s and propelled by wind-powered sails. In 1873, the Palmers Shipbuilding & Iron Company assembled the first steam-driven oil tanker, named the Vaderland. Meanwhile, oil producers in Pennsylvania had been making use of barges -- large, unpowered boats that must be tugged by another ship [source: PortCities Southampton].


The first modern oil tanker was the Zoroaster, designed and built in 1878 by Ludvig Nobel of Sweden. Ludvig and his brother Robert served as the principals of a large oil company called Branobel. (Ludvig and Robert were also brothers to Alfred Nobel, inventor of dynamite and the man for whom the Nobel Prizes are named) [source: Frantz].

Today, oil tankers fall into two basic categories, crude tankers and product tankers. Crude tankers are the larger of the two. They move raw, unrefined oil from the places where it's pumped out of the earth, to the refineries where it's processed into fuel and other products. Product tankers, on the other hand, are smaller than crude tankers and move already-processed petroleum products to markets where those products can be sold and used [source: Strauss Center].

Corporations are always seeking the most efficient way to accomplish a task in order to maximize profits. Due to their immense size, oil tankers provide an easy and inexpensive way to transport oil over long distances. In fact, it only costs around two to four cents per gallon to transport oil using a typical tanker.

Like many other influential technologies, oil tankers have helped us progress as a civilization -- but they've presented us with considerable problems as well. Without oil tankers, it would be impossible to enjoy the mobility many of us take for granted. Yet, some of the worst man-made environmental disasters resulted from oil tanker accidents befouling waterways and beaches.

This article follows the evolution of the oil tanker and its impact on history. We'll also take a look at what lies ahead for oil tankers.

To find out more about the different types of ships that transport oil, go to the next page.


More Types of Oil Tankers

The VLCC-class tanker MV Sirius Star at anchor off the coast of Somalia, shortly after being overrun by pirates.
U.S. Navy/Getty Images

In addition to classifying these mighty maritime vessels as crude tankers and product tankers, we can sub-categorize them even further. Some tankers are built to haul oil from one point to another, while replenishment oilers are designed to ferry fuel out to ships at sea and refuel them. Sometimes, if sea-bound tankers become too old or uneconomical to operate, they're used as floating storage units.

If you work in the oil transport business or have an interest in it, you'll probably hear the following terms:


  • Double Hull - A mandatory design feature on newly built oil tankers; double-hull construction means the ship has two hulls, one inside the other. This offers an extra layer of protection against damage that might otherwise result in catastrophic oil spills.
  • DWT - Deadweight tonnage refers to the maximum load of cargo, fuel, provisions and ballast a ship can carry. DWT is usually measured in metric tons.
  • OBO - The idea behind these ore-bulk-oil carriers is to give them something to carry on the return leg of their trips, so that they can make money both ways. As the name suggests, the return cargo is usually iron ore.
  • LR1/LR2 - Large Range 1 and Large Range 2 tankers have a DWT between 45,000 and 159,999 metric tons (49,604 and 176,369 tons).
  • VLCC -Very Large Crude Carriers weigh between 160,000 and 319,999 DWT (176,370 and 352,739 tons). Oil carriers of this size and above are known as supertankers.
  • ULCC - Ultra Large Crude Carriers are the largest oceangoing vessels -- with DWTs of 320,000 metric tons (352,740 tons) and above -- and are comparable in length to the height of some of the world's tallest buildings.

Two different classification scales are used to categorize ships. The ship descriptions above use the Average Freight Rate Assessment (AFRA) system. However, another method, called the flexible market scale, differs slightly in its weight limits for some size categories of ships.

In the next section, you'll learn some of the rules and regulations that govern how oil tankers are built, operated and maintained.


Oil Tanker Mishaps, Tougher Laws

A sea otter relaxes near Alaska's Prince William Sound in 2004. The local ecosystem is still recovering from the Exxon Valdez tanker spill in 1989.
David McNew/Getty Images

On March 24, 1989, the world watched in horror as one of history's most environmentally destructive oil spills marred Alaska's Prince William Sound. The accident -- caused when Exxon's tanker Valdez ran aground -- would make the ship's name synonymous with man-made catastrophe. The Valdez spill would become a case study in how operator fatigue, environmental factors and faulty decision-making can mix for disastrous results.

The tanker ran aground just after midnight on the sound's Bligh Reef and gushed out nearly 11 million gallons (41.6 million liters) of oil. The slick killed countless birds, sea otters and other marine life. Viscous, foul-smelling oil coated the once-pristine shoreline and spread out to cover 120 square miles (310.8 square kilometers) of ocean around the tanker [source: Mauer].


If anything good came from the Valdez spill and others like it, it's that global standards for design, safety and maintenance have since become more stringent. The biggest recent change to hit the supertanker industry is the transition from single-hull to double-hull construction. Double hulls aren't as prone to breaches that result in oil spills, although they're not totally impenetrable. Some observers say that the protection provided by double hulls is exaggerated somewhat. Nonetheless, authorities demand that the transition to a global double-hulled oil tanker fleet be completed sooner rather than later.

The United States and various international bodies have established deadlines for implementation of the double-hull design. In 2007, the European Union (EU) made it mandatory for ships carrying heavy oils to be double-hulled to use ports in EU nations or to drop anchor in their waters. The United States passed a law in 1990 to phase out single-hull tankers by 2015. The deadline was later moved up to 2010. The International Maritime Organization (IMO), a United Nations agency that regulates global shipping, also has called for the eradication of single hulls by 2010.

Oil spills represent one threat to the environment, but explosions and the fires that result can pose a real danger to crew members aboard oil tankers. Even in an empty cargo compartment, a single spark can turn fumes into an inferno. That's why tankers of 20,000 DWT (22,046 tons) and above have inert gas systems installed that take gas from the ship's boiler flue, and pump it into empty oil tanks and partially filled tanks. This inert gas makes the air within those spaces nearly impossible to ignite [source: International Maritime Organization]. The IMO also requires inert gas systems on all new oil tankers.

Oil tankers feature thoroughly designed safety and security systems to guard against accidents. But how do tanker crews deal with those who wish to do intentional harm -- like pirates?


Fully Loaded Oil Tankers: A Prize for Present-Day Pirates

A parachute floats down to hijacked oil tanker MV Sirius Star, nearly two months after it was attacked by pirates off the coast of Kenya.
U.S. Navy/Getty Images

Generally speaking, petroleum products like gasoline may not cost much at the pump, but the cargo of a fully laden tanker can be worth tens of millions of dollars. This fact has attracted the unwanted attention of pirates that attack tankers at sea and hold crews and cargo hostage for big ransoms.

Modern-day pirate exploits leaped into the public consciousness in November 2008, when pirates off the coast of Kenya seized the Liberian-flagged MV Sirius Star supertanker as it carried a payload of 2 million barrels of oil. The pirates demanded $25 million to release the ship's crew. A rash of similar piracy incidents in the treacherous Gulf of Aden had shipping companies and the navies of industrialized nations scrambling to improve high seas security [source: Paphitis].


Pirate attacks increased in early 2009, particularly in the Gulf of Aden region. However, by then, the bandits were having more difficulty capturing ships due to crewmembers' growing awareness of the risks of traveling with such valuable cargo and an increase of naval ships in the area. In fact, the International Association of Independent Tanker Owners (Intertanko) issued a document for tanker personnel, "Best Management Practices to Deter Piracy in the Gulf of Aden and off the Coast of Somalia." For many pirates, political instability and crushing poverty in their homelands make the dangerous but potentially lucrative heists worth the effort. The Intertanko guide offers several tips that have helped ships foil pirates as they sail in high-risk waters:

  • Go fast. No pirate attacks have succeeded when the targeted ship was moving at 15 knots (about 17 miles per hour or 27 kilometers per hour) or faster.
  • Be most vigilant at first and last light each day, as those are the times when most attacks occur.
  • Have an emergency response plan that includes evasive maneuvers, using the ship's wake to upset the pirate's small boarding craft, and perhaps even the use of high-pressure water hoses to deter boarding.
  • Travel in convoys with other ships and keep in touch with naval forces patrolling the area.
  • Post dummies at strategic deck locations to fool pirates into thinking the crew complement is larger and more watchful than it actually is.

It's generally recommended that crews cooperate fully with pirates to avoid unnecessary violence.

Obviously, the oil shipping trade is big business. To find out more about the business aspects of oil tankers, go to the next page.


The Business of Oil Tankers

An oil tanker rides through Plaquemines Parish, Louisiana in 2008. Oil production suffered in the wake of Hurricanes Katrina and Rita in 2005.
Mario Tama/Getty Images

Before an oil tanker takes on a single drop of cargo, the company that owns the ship enters into a highly detailed agreement called a charter. Several types of charters exist. There's the bareboat charter, in which a company that wants to use a ship agrees to pay all of the boat's operating expenses for a set amount of time, usually measured in years. Other options include the spot charter, in which the ship is contracted to deliver a specific amount of cargo between one port and another within an agreed time frame; and time charters, in which a party pays the ship's owner to use the ship for a specified amount of time.

In the shipping business, profits are made through shrewd understanding of the markets. For the most part, there's greater demand for tankers than there is capacity, so long-term charters of several months to several years are common [source: Platou Report].


A large tanker will typically carry a crew of about two dozen and can cost $100 million or more. After paying for expenses, VLCC-class ship owners can expect profits of at least $60,000 a day. That profit varies depending on several factors, including tanker availability and the strength of the oil market. During times of high oil demand, daily profit per tanker can skyrocket [sources: Strauss Center and Wright].

When the current global financial crisis took hold in 2008, it appeared that the oil industry-friendly era of fuel-guzzling cars, trucks and SUVs had ended. Fears about oil supplies running out and the dangers of climate change caused by burning fossil fuels has triggered a worldwide race to produce cars, trucks and even airplanes that can run on eco-friendly fuel sources.

So, what does the future of the oil tanker industry look like? Frontline, the biggest owner of oil tankers, warned in February 2009 of "weak fundamentals" facing its industry for the rest of the year. Still, earnings for tankers have held up well compared to ships that carry other goods -- collectively known as dry bulk and container ships.

Falling oil prices and tanker demand, for instance, helped to depress Frontline's fourth-quarter 2008 profit to $52.7 million. That's compared to $201 million a year earlier, when the oil market was much stronger [source: Wright]. In the long term, though, the industry seems optimistic about demand, since older, single-hulled ships are being scrapped and must be replaced to meet the need for oil around the world.

For more information on oil tankers, take a look at the links on the next page.


Frequently Asked Questions

How do oil tankers navigate through narrow waterways and busy ports?
Oil tankers employ skilled navigators and advanced navigational technologies such as GPS, radar and sonar to safely maneuver through narrow channels and congested port areas, ensuring efficient and secure transportation of oil cargo.
What measures are in place to prevent oil spills and mitigate environmental damage during oil tanker operations?
Oil tanker operators implement various preventive measures and safety protocols — including double-hull construction, onboard spill response equipment and adherence to international regulations such as the International Convention for the Prevention of Pollution from Ships (MARPOL) — to minimize the risk of oil spills and reduce environmental impact during transportation.

Lots More Information

More Great Links

  • Environmental News Service. "Double Hulled Tankers for Heavy Oil Now Law in Europe." April 28, 2007. (Accessed March 9, 2009)
  • Environment News Service. "Single Hull Oil Tankers Banned Worldwide from 2005." Dec. 5, 2003. (Accessed March 10, 2009)
  • Frantz, Douglas. "Baku Journal; How the Nobels Made a Prize of Baku." The New York Times. Feb. 3, 2001. (Accessed March 10, 2009)
  • Houreld, Katherine. "Somali Pirates Keep Up Attacks, But Seizures Fall." The Associated Press. March 12, 2009. (Accessed March 12, 2009)
  • International Maritime Organization. "Tanker Safety - Preventing Accidental Pollution." (Accessed March 8, 2009)
  • INTERTANKO. Best Management Practices to Deter Piracy in the Gulf of Aden and off the Coast of Somalia. February 2009. (Accessed March 8, 2009)
  • Lavelle, Marianne. "Some Deem Double Hull Tankers Worth The Cost." U.S. News & World Report. Feb. 29, 2008. (Accessed March 8, 2009)
  • Mauer, Richard. "Exxon Valdez - Legacy of a Spill." Anchorage Daily News. May 13, 1999. (Accessed March 7, 2008)
  • "N.J. seeks compensation for Delaware River oil spill." The Associated Press. Jan. 7, 2009. (Accessed March 10, 2009)
  • O'Harra, Doug. "Researchers track crude's wandering trail." Anchorage Daily News. May 13, 1999. (Accessed March 8, 2009)
  • Oil Companies International Marine Forum. "Double Hull Tankers -- Are They the Answer?" 2003. (Accessed March 10, 2009)
  • Pals, Fred and Baratti, Gianluca. "Oil Tanker Attack May Spur Increased Security, New Routes." November 18, 2008. (Accessed March 7, 2009)
  • Paphitis, Nicholas. "Tanker crew fights off attack by pirates." The Scotsman. Jan. 3, 2009. (Accessed March 8, 2009)
  • The Platou Report. "The Tanker Market." 2008. (Accessed March 9, 2009)
  • PortCities Southampton. "The Oil Tanker Emerges." (Accessed March 8, 2009)
  • The Robert S. Strauss Center for International Security and Law. University of Texas at Austin. "Tankers." August 2008. (Accessed March 8, 2009)
  • Seas at Risk. "Double-hull tanker safety." (Accessed March 8, 2009)
  • Turner, Allen. "Tanker's Double Hull Prevented Disaster." Houston Chronicle. March 11, 2009. (Accessed March 11, 2009)
  • Wright, Robert. "Frontline hit by falling charter rates." Financial Times. February 26, 2009. (Accessed March 8, 2009)