NEW YORK (Bloomberg) ? Bermuda-based Frontline Ltd., the world?s biggest oil-tanker company by capacity, may be able to charge more for space on ships loading a million barrels of oil or more next year as demand for the fuel grows.

?It looks like the market may be even tighter next year than this year,? said Tom Jebsen, chief financial officer at Frontline?s operating division, Frontline Management, at an oil and offshore conference in Oslo yesterday.

Frontline has been benefitting from several effects boosting tanker demand, Jebsen said. While 45 percent of crude is transported by sea, almost all the additional production to meet rising oil demand will have to go on tankers. In addition, output near the biggest consuming nations is falling, meaning oil has to travel greater distances from regions such as the Middle East, West Africa and the former Soviet Union.

Frontline and Teekay Shipping Corp., the two biggest tanker companies, are set to report a second year of record profits this year. A global economic expansion, led by China, has boosted crude- oil consumption. The Organisation of Petroleum Exporting Countries, the source of a third of the world?s oil, is pumping near capacity to curb record fuel prices.

As nations such as China and India develop, boosting energy consumption, they need to build inventories to ensure forward coverage of supplies. This adds to oil and tanker demand, Jebsen said.

The International Energy Agency, the oil adviser to 26 industrialised nations including the US, estimates oil demand will grow 3.2 percent this year and 2.2 percent in 2005. This year?s increase translates to a 7.5 percent rise in shipping demand, Jebsen said.

Next year shipping demand will probably climb more than four percent, based on the IEA forecast. At the same time the net growth for the world?s fleet of very large crude carriers, which carry about two million barrels each, may be 3.8 percent, Jebsen said. Supply growth for million-barrel tankers should be one percent, he added.

The IEA estimates may be too conservative, Jebsen said. Frontline operates 35 VLCCs and 19 so-called Suezmax tankers that can haul one million barrels each.

VLCC tariffs fell by about a third last month. Refineries schedule maintenance at the end of summer and import less crude as demand drops and as they prepare to switch from producing gasoline to making heating oil.