Three months after the strait’s effective closure, crude tanker earnings remain at solid levels as global trade routes reshape around the blockage

A complete redrawing of crude oil flows
The closure of the Strait of Hormuz since late February has removed roughly one-fifth of global seaborne oil supply from its traditional route, forcing the largest rerouting of crude trade in modern history. Asian refiners are reaching as far as the US Gulf to source replacement barrels, with some Suezmaxes even transiting the Panama Canal to Asia, a route virtually unheard of  before the conflict. VLCC earnings surged above $240,000 per day in March and have remained above $200,000 per day into May. Roughly 59 VLCCs, about 8% of the non-sanctioned fleet, remain stuck west of the strait, and with vessels travelling longer distances to serve the same demand, effective fleet capacity has tightened dramatically even as total crude volumes have declined.

A ceasefire framework emerges, but reopening will take time
On May 25, the US and Iran announced a framework extending the ceasefire by 60 days while the strait is de-mined and reopened. This is the most credible path to normalisation since the conflict began. However, even under the best scenario, clearing mines, recalibrating war-risk insurance, and processing the backlog of over 1,500 stranded vessels will take weeks, not days. If the framework holds, rates will correct as tonnage floods back; if it falters, current earnings are structurally supported well into the third quarter. For investors, the key variable has shifted from how high can rates go to how quickly can they normalise.