This is the widest supply and demand gap we have seen in a very long time. Slide 35. Talked a lot about ton-mile today, but sometimes it is useful to just look at tons as in consumption. This is a combination of data from the IEA, MSI and IMF, O&G. In brief, the pandemic is behind us, certainly from a point of our consumption anyway. We are exceeding pre-pandemic consumption levels and consumption continues to still accelerate. Once again, it is worth looking at what has been happening with global road fuel demand and aviation demand just this past week. Slide 36. This is it, final map of the day. I will spend very little timing because you will have heard us talk about this all before. But the key messages really remain fundamental demand drivers, consumption, refinery dislocation, China emerging from COVID, embargo on Russian oil products.
This results in an estimated ton-mile increase of 10% year-on-year for product tankers and 8% for chemical tankers. Slide 37. Let’s take a closer look at supply, and it is worth lingering here for just a moment before I conclude my slides. When you look at the order book for product tankers on the left, you really have to travel quite far back in time to get to a point when the order book was anywhere near this low because you have to zoom out all the way to the year 2000. I personally dislike the term generation opportunity because it is so overused, but it is really hard to argue with these numbers. But equally important is the chart on the right, the green dotted box here. 40% of the fleet will be older than 20 years in five years’ time.
That is really old for our sector. It is getting older, there’s very little ordering and this has been a long time in the making. Slide 38 makes an important point on where environmental regulation comes in, in this context. These older ships we just looked at are less fuel-efficient. That means higher carbon footprint. Older ships will become more expensive to operate and to own. At the same time, anyone who wants to order a ship today must realize that the useful life of the asset will take them straight to 2050. By 2050, the industry aspires to have reduced carbon intensity by 70%. There is a lot of meaningful discussion in the industry about future propulsion technology, but a winner has yet to emerge. This creates a mountain of uncertainty for anyone ordering ships today.
So environmental regulation, this incentivizes the operation of older ships. But environmental regulation also disincentivizes the ordering of new tonnage. So flipping back to Slide 37 then, supply-side gap is already significant. Environmental regulation will only increase this gap. This completes my section for today. Of course, I’m happy to answer questions later. Thank you so much for your attention.
Anthony Gurnee: Right. So just we’ll go ahead and just sum everything up now. So regarding the markets. In summary, the second half of 2022, market strength is continuing into the first quarter. Near-term outlook is very strong given the reordering of global product tanker trades and the medium-term outlook is positive as well for both products and chemicals based on the strong supply-demand fundamentals. Starting the company, we are reporting record earnings. We are performing very well and, in fact, thriving in these volatile markets, cash breakeven and substantially strengthened our balance sheet, which enhances the quality of our earnings, the quality of the dividend and the substance behind the NAV calculation for Ardmore.
