Tanker Shipping Market Overview & Outlook 

Export disruptions increasingly hurting tanker demand

“Tanker markets are facing mounting pressure as export disruptions continue to reduce seaborne volumes, while declining oil and product stocks increase the risk of higher oil prices, weaker economic growth and lower tanker demand,” says Niels Rasmussen, Chief Shipping Analyst at BIMCO.

Although the Memorandum of Understanding (MoU) signed by the US and Iran on 17 June briefly raised hopes of a reopening of the Strait of Hormuz, negotiations have stalled and safe passage through the strait remains far from assured. As uncertainty persists, we continue to present two outlook scenarios: one where conditions gradually normalise during the fourth quarter of 2026 (“SoH open”) and one where current disruptions continue for the remainder of 2026 and throughout 2027 (“SoH closed”).

Year-to-date oil and heavy-product export volumes have fallen 5.7% year-on-year while clean-product export volumes have declined 11.2%. Despite this, product tanker tonne mile demand has increased slightly year-to-date as LR2s have captured more crude oil and heavy-product volumes.

Persian Gulf exports remain well below previous levels, Saudi Arabia’s Red Sea exports have fallen under the weight of the Houthis’ embargo and Russian exports have increasingly been affected by attacks on refineries, oil infrastructure and shipping. Together, these developments threaten tanker demand.

At the same time, global oil and product stocks have fallen by more than 500 million barrels as stock releases have compensated for lost production. Refined product stock levels, particularly diesel, are especially strained, and OECD oil and product stocks could fall to 70 days of cover by late 2027

“Unless normal oil export volumes can soon be restored, declining oil and product stocks could eventually threaten tanker demand. The longer export disruptions persist, the risk that stock releases can no longer compensate for lost oil supply increases, potentially leading to higher oil prices, lower economic growth and weaker tanker demand,” says Rasmussen.

Despite weaker cargo demand, dirty tanker freight rates increased sharply following the outbreak of the US-Iran war and have remained elevated. Reduced fleet productivity, stranded ships and delays have tightened effective ship supply which, along with higher war-risk premiums, supported rates. Clean tanker freight rates have also increased, but by considerably less due to fleet growth and lower dependence on the Persian Gulf.

“Should conditions in the Strait of Hormuz gradually normalise, we expect tanker demand to recover during 2027 as export volumes increase and oil and product stocks are replenished. However, improved fleet productivity and continued fleet growth is likely to lead to a gradual normalisation of freight rates. If disruptions persist, tanker demand could weaken further during 2027 as oil and product stock depletion could hurt demand while ship supply growth accelerates,” says Rasmussen.