Why is it an old school, not a new school? Can you lay the picture a bit? No, because at the end of the day it's supply and demand driven, and more notably the last cycle which we've talked about endlessly, the period from 2003 until 2008 or 2002 to 2009 or whatever, that was a demand driven story ever since China joined the World Trade Organization and China became a fast-growing economy. Their oil demand growth surpassed anybody's expectation, and of course the fleet was not there to cater for it. So you didn't have enough supply of vessels to manage their increased demand of oil in particular, and coal and iron ore and every other commodity under the sun. But this time around, ever since ESG came into fashion and nonsustainable businesses were targeted and looked upon as a bad investment, we've had this vacuum of investing in the industry that we represent and a lot of other shipping segments have seen some of the same. So we are still to this day underinvested in transportation, particularly for oil. If you look at the regulatory framework that is around us, we're trying to reduce emissions and so forth.
At the same time, we have the oldest, probably most inefficient fleet we've had for 25 years. The average age is important because it is still so, and this is a fact, this just came up in the investor meeting I had: well, is this really a limit at 20 years? Wouldn't people just shift to older vessels if they can? The entire oil trading complex is not set up for 20-plus tankers. The proof is in the pudding. We've done voyages that pay 130, 140, even $160,000 per day. The charter has not gone to 20-plus. They continue to fix modern vessels. This is logical because in that oil trading chain, there are a lot of pieces you don't control. Even if you're Exxon or Equinor or whoever, first of all, the most important thing when you move oil is optionality. Even though the cargo may be destined potentially to your own refinery where you also own the terminal, none of these vessels are fixed without options because if something happens to oil price in the next 60 days until that oil arrives at the refinery, or 90 days for that sake, you want options. And then if you have a 21-year-old vessel, you basically lose 80% of those options because there are so many other terminals that you don't control that will have these limitations.
But you can't even start there because trading oil is a margin game, and a 20-plus vessel, the insurance on the cargo will just go through the roof and kill the margin in the first place. This is why advanced oil traders will tell you that the only thing they can use the 20-plus vessel for is storage potentially, and then they have a long-term plan for the vessel, or of course if the vessel is just going to shuttle between A to B, we've seen this in India, so if it's an Indian flagged vessel, it can actually live until it's 25, but that's for designated trades where the logistics are under control, they know exactly where it's going to load and discharge. So, to get back to this old school bull market, if you put into your model that tankers actually don't trade in any market really, at least in the compliant market after they're 20 years old, we're going to have a very limited fleet growth for the next two, three years. We've actually had a period of negative growth. If you look at vessels below 20 years, that has been negative for VCC since 2021. For all the asset classes that Frontline trades in, it stopped growing sometime in September 2022 and has actually reduced ever since. So with this and the realization that oil demand is probably not going to stop growing, then we're going to be short tonnage. We're not going to be short oil as we just discovered. We're not going to be, the product is going to be transported, but we're going to be a little bit short on the shipping side.
