ABSTRACT Recent developments of engineering analysis methods enable useful forecasts of physical life of ship hull structures, piping, and machinery. Economic analyses of the costs of rehabilitation and increasing maintenance costs can demonstrate that the useful life of tankers can be extended many years at significant savings over replacing 15- to 20year old vessels. THE TANK SHIP OWNERS' OUESTION: VESSEL USEFUL LIFE? The last two decades have been hectic for tank ship owners and their builders. Business and revenue boomed in the early 1970s, faltered in the mid-1970s, and rose again at thestart of the 1980s. Prospects crashed to depression by the mid-1980s and only now are returning to normal. Theproximate cause for these demand fluctuations were the double OPEC oil price shocks of 1973 and 1979 that caused worldwide economic disruptions. Crude oil tankers, and especially the very large crude carriers (VLCC) and even larger tankers were being over orderedand over-built from 1968 to 1975. Then in 1973, the Persian Gulf OPEC countries raised prices from $3 to $13 per barrel for crude oil cutting oil transport demand quite sharply. Even though tanker capacity supply was suddenly about 35% excess over demand, more tankers were ordered later. As shown in Figure I, most of the VLCC/ULCCs (that represent about two-thirds of all tanker capacity) were delivered between 1973 to 1978(1). Over 100 million deadweight tons (dwt) of tank ships were scrapped in the early 1980s to reduce the excess fleet. Crude oil prices have plummeted since 1986; therefore, demand has escalated and the gap between excess tanker supply and demand has narrowed. Ship charter hire rates have at last escalated to profitable levels for existing tankers for the first time in 20 years. Since the last major ship orders in the late 1970s, extensive cuts have been made in the world shipbuilding industrycapacity. Few shipyards are now able to build large ships and are quoting increasingly high prices. (These prices should go up even more when state subsidies are discontinued by international agreement.) For example, a 1971 vintage VLCC that originally cost $15 to $20 million will now cost nearly $100 million to replace. If a double hull is required, the new building cost is over $110 million. Therefore, charter rates must increase even more to make profitable investment in expensive new tankers. In summary, ship charter rates now are not adequate to pay for building and operating new tankers. In addition, not enough ships of each kind have been built in the last decade. As a result, economics forces most owners to keep using their existing ships longer than their typical 16- to 20-year life span. BASIS FOR LIFE EXTENSION During the last two decades, many tank ships and other vessels have been laid up or slow-steaming and extended porttimes, some for several years and in varying degrees of care. As a result, they have not been worked hard nor overstressed.