A warming Pacific has cut Panama Canal capacity, and canal access now sets the cost of moving LPG from the US Gulf to Asia. El Niño tightens an already constrained canal El Niño is a natural climate cycle that typically occurs every two to seven years. Warmer Pacific waters shift rainfall patterns, leaving Central America drier. NOAA declared El Niño conditions on 11 June 2026 and expects a strong event, peaking between October and December. For shipping, the key issue

Rates, ship values and trade routes have all reset since 28 February, with the change in routing looking more lasting than the risk premium. Rates and ship values have moved to a new level US and Israeli strikes on Iran on 28 February 2026 led Iran to close the Strait of Hormuz, which previously carried approximately 20 million barrels of oil per day, or around one fifth of seaborne crude. VLCC earnings have risen from an average of approximately $58,500

Crude earnings ease in the Atlantic while Panama Canal restrictions push gas transit costs to a record. Tankers: Crude rates remain high as the Atlantic cools VLCC earnings held near $230,000 per day in the week to 28 August, while Suezmax and Aframax earnings settled at approximately $179,000 and $100,000 per day. Atlantic rates eased as vessel availability increased, while Eastern markets remained firm as Hormuz keeps Middle East tonnage scarce. Pacific ballasters are up 15% since 9 August, and

Fewer crude liftings and reduced Panama Canal transits are limiting vessel availability, while Chinese vehicle exports are increasing demand for car carriers. Tankers: Suezmax earnings rise to $238,000 per day, matching VLCCs Suezmax spot earnings rose 15% last week to approximately $238,000 per day, matching VLCC earnings. Fewer Middle East liftings are shifting more crude flows towards the Atlantic basin, where Suezmaxes are often favoured over VLCCs, as the vessels suit loading capacity at Brazilian and US ports. Suezmaxes are

Iranian exports remain reduced, with significant risk attached to transiting the Strait of Hormuz. Sanctions replace military pressure as the main instrument US Treasury Secretary Scott Bessent is expected to announce new economic measures against Iran on Monday, shifting the focus from further military action towards sanctions. The measures could target Iran’s largest trading partners, including China, Turkey and India, and extend beyond the earlier focus on smaller refineries, ports and agents. Annual inflation in Iran is above 80% and

Suezmax earnings have averaged above VLCC levels in 2026 as growing Atlantic crude exports favour smaller cargo parcels and vessel availability remains tight. Suezmax earnings have outperformed VLCCs throughout 2026 Suezmax earnings rose 15% week over week to approximately $238,000 per day, matching VLCC earnings despite carrying roughly half the cargo. The strength extends beyond the current week. Suezmax earnings have averaged approximately $163,000 per day in 2026, compared with approximately $159,000 per day for VLCCs. This marks a change

Limited availability of prompt tonnage is pushing buyers to pay a premium for ships that can trade today, while newbuildings ordered now will not deliver until 2029. Delivery timing is driving a widening premium for modern tonnageSecondhand crude tanker values have risen above newbuilding prices, reflecting the scarcity of vessels available to trade immediately. A five-year-old Suezmax is now valued at approximately USD 108m, around USD 18m above a newbuilding at approximately USD 90m. For Aframaxes, the premium is approximately

Iran has set conditions for reopening that Washington has rejected, keeping Gulf crude exports constrained and tanker earnings elevated. Reopening remains dependent on conditions Washington has rejectedIran’s lead negotiator has stated that the Strait of Hormuz will remain closed until the United States lifts its naval blockade, removes oil sanctions and ends military operations. President Trump has said that no negotiations are currently taking place, leaving the situation at a standstill. Traffic through the waterway has fallen further in recent

Disrupted Middle East loadings are shifting crude demand towards the Atlantic, while constraints in the Panama Canal and limited PCTC supply continue to support rates. Tankers: Suezmax earnings rise to above $200,000 per day as crude demand shifts to the AtlanticSuezmax earnings rose 13% to above $200,000 per day, the highest level this year, driven by increased activity in the Atlantic rather than the Middle East. With Persian Gulf loadings blocked, refiners are sourcing crude from West Africa, the Americas

The East-West pipeline is becoming increasingly important to Saudi Arabia’s crude export system as more volumes are shipped from the country’s west coast. Saudi Arabia is increasingly transporting crude through the East-West pipeline to the export terminal at Yanbu on the country’s west coast. From there, crude can be shipped via the Red Sea to international markets without passing through the Strait of Hormuz. This alternative export route has become increasingly important as traffic through Hormuz remains heavily constrained. Only