Market overcame volatile early trends this month

The tanker market saw mixed trends in early May, with both upward and downward pressure at times. Crude rates initially fluctuated before regaining momentum mid-month, supported by increased fixing activity. By late May, average VLCC and Suezmax earnings had firmed, and the product tanker segment saw notable strength, reaching its highest levels in two months, with average earnings rising to over USD 25,000/day.

OPEC+ supply boost shaping outlook
A key driver this month has been OPEC+’s phased unwinding of voluntary production cuts. The group is set to return 960,000 barrels per day (bpd) of oil to the market from April through June, and may fully reverse the earlier 2.2 million bpd cut by October. The additional seaborne crude volumes are expected to support global tanker demand, particularly for long-haul VLCC and Suezmax routes from the Middle East.

According to Arctic Securities, managing the increased volumes could necessitate the equivalent of 70 annual Suezmax shipments, further tightening the tonnage balance as supply ramps up.

Sanctions, shadow fleet drive a tighter market balance
The role of the shadow fleet continues to grow in importance. These vessels – largely older tankers trading sanctioned oil from Russia, Iran, and Venezuela – now account for an estimated 23% of the global fleet. Regulatory pressure on this segment intensified in May, with over 340 vessels sanctioned by the UK and EU. Several incidents, including a blocked vessel in the Baltic and renewed security concerns in the Middle East, have reinforced the compliance risks associated with grey fleet operations. Read more about how we estimate the shadow fleet to impact the market going forward (here).

Fundamentals support a promising outlook
Leading analysts from Clarksons and Fearnleys now highlight a clearly improving structural outlook for the tanker market. With rising oil supply, increasing regulatory scrutiny on non-compliant vessels, and a historically thin order book, the market balance is tightening. While the spot market may remain volatile in the short term, the broader setup for the tanker segment is positive and increasingly supported by fundamentals.