(Bloomberg) ? The world's fleet of oil tankers grew last year at its fastest pace since the 1970s as owners kept older carriers in service to take advantage of record freight rates, London-based shipbroker Simpson, Spence & Young said.

The fleet, when measured by capacity, grew by 15.9 million deadweight metric tons, nearly double the growth in 2003, Simpson, Spence said in a bi-annual report last week. That excludes vessels with a capacity of less than 10,000 deadweight tons.

The capacity of tankers sent for demolition at scrap yards, including those in China and India, fell by ten million deadweight tons, the lowest in six years, Simpson, Spence said. "This reflected the profitable trading opportunities for older vessels and resulting reluctance of their owners to sell for scrap," the shipbroker said in its report.

Freight rates for tankers carrying crude and refined oil products like gasoil and jet fuel reached all-time highs in 2004 as oil producers pumped at near capacity, boosting profits for Bermuda-based Frontline Ltd. and Teekay Shipping Corp., based in the Bahamas, the world's two biggest oil-tanker companies.

Annual growth in the world tanker fleet has averaged 2.5 million deadweight tons in the past decade, the broker said. The fleet will expand this year by 5.5 percent, or 16.7 million deadweight tons.

Supplies of vessels of up to 50,000 deadweight tons, known as Medium Range tankers, grew 16 percent last year, the most in the fleet, Simpson, Spence said. The fleet of so-called Panamax vessels, the largest that can sail through the Panama Canal with a full cargo, rose by 9.6 percent.

Supplies of tankers that carry a million barrels of oil each, known as Suezmaxes, rose by 6.2 percent. Very large crude carriers, or VLCCs, which each carry 2 million barrels, grew by 4.7 million deadweight tons, "its biggest rise in decades," the broker said.

Shipowners operating modern VLCCs earned a record $250,000 a day in November on the 39-day round trip between the Persian Gulf and South Korea after deducting costs such as fuel and port fees., according to Bloomberg data and a formula on the Web site of R.S. Platou, an Oslo-based shipbroker.

That's about ten times what Frontline needed to break even on its 35 VLCCs.

Ships with a total capacity of ten million deadweight tons will be scrapped this year, Simpson, Spence estimated. The United Nations this week banned single-hull tankers from carrying heavy oils after one of them, the Prestige, split and sank off Spain in 2002. Such vessels have just one layer of steel separating their cargo from the sea.

The world fleet of tankers was made up 3,670 vessels of 318.1 million deadweight tons, Simpson, Spence said.