Shipping legislators agreed yesterday to eliminate all single-hulled tankers by 2021 and gave individual countries an option to ban them from their waters by 2015, the French Transport Ministry said.

It said European Union countries, eager for an agreement to protect their coastlines from pollution hazards, had all announced their intention to use the 2015 option. The measures were approved by a working group of the International Maritime Organisation (IMO), shipping's self-regulated legislative body, at a meeting in London.

A ministry statement said the group agreed on a 2005 deadline for the elimination of the oldest single-hulled tankers with a dead weight capacity of more than 20,000 tonnes, with a final ban in 2021 on all tankers without double hulls.

Double-hulled tankers offer greater protection against oil spills during low speed collisions and groundings. "The IMO has decided to eliminate the oldest and heaviest single-hulled tankers starting in 2005, but the deadline is 2021 for newer, lighter ships equipped with reinforced protection systems," the ministry statement said.

It said EU members, which initiated the entire IMO review of tanker safety, pushed through an amendment allowing any state to bar single-hulled tankers from entering its ports after 2015.

The EU has been most eager for an agreement to protect its coastlines after a Maltese-registered tanker, the Erika, spilled 8,000 tonnes of heavy fuel oil off of France's Atlantic coast when it broke up during a storm in December 1999. Since then Europe has suffered five more minor tanker accidents in its waters.

"All single-hulled tankers will be barred from European waters no later than 2015, while older and heavier ones will be barred by 2005 or 2010," the statement said. The United States, stung by the Exxon Valdez Alaskan oil spill in 1989, has already set a deadline banning single-hulled tankers from U.S. waters from 2015 - a move that was seen as undermining the IMO's international status.

Fearful of becoming a dumping ground for old tankers if the EU went ahead with its threat, Asian states strongly backed an international solution at the IMO. In other tanker news, a crucial Caribbean tanker fleet re-entered the market this week, having been held back for over a month because of a dispute between its owner, Pegasus Shipping, and junk-bond creditors in New York.

U.S. brokers said the fleet's return would add surplus tonnage to a market that is already cooling, and would put further downward pressure on freight rates. Fuel oil freight stood at around $1.65 per barrel for 50,000 tonne upcoast cargoes on Friday, compared to about $1.90 per barrel in mid-March, brokers said.

Pegasus said the two time-charters and five spot fixtures so far completed were all done at market rate. Chairman Nicos Peraticos has resumed negotiations with bondholders and hopes to complete a buy-back of the $150 million Pegasus debt in June, a spokesman in London said.

The 11 tanker fleet had been held back from trading on fears it would be impounded after a bondholder had one of the tankers, the 62,000 tonner Kite, impounded in Jacksonville, U.S. on March 16.

The fleet operates in a niche sector of just 100 or so ships carrying 50,000 tonne cargoes of crude and fuel oil from Caribbean refineries to the United States. An anticipated freight surge when the fleet was withdrawn never happened, brokers said, but charterers remained edgy while the market imbalance continued.

Pegasus is offering bond-holders $75 million cash to write off the $150 million debt, which would leave it with vastly improved finances in a market that analysts have tipped to soar in the fourth quarter of 2001.

"Products imports are playing a bigger swing role in the U.S. than ever before," Paul Horsnell of Oxford Energy Studies told a tanker owners' conference in Sydney this week. "Expect a surge in demand for fuel oil imports every fourth quarter."

And while demand for this size range of tankers is high, supply is short. "This sector has been neglected in terms of investment in new tonnage in the past decade, which is beginning to result in an acute shortage of modern ships," said London tanker broker SSY.

Shipowners tapped the U.S. junk bond markets between 1997 and 1999, and since then much of the debt has been bought back having traded down to less than half its original value.