Disrupted trade routes and a shrinking pool of available tonnage kept crude tanker earnings near record levels in August, with modern tonnage continuing to command a premium.

Trade disruption continues to remove ships from the market

The Strait of Hormuz remained effectively closed to commercial shipping through August, with vessel transits falling further towards month end. Vessel passages through the strait in August have averaged between 10 and 20 vessels per day, with the majority of them being tankers. The 60-day negotiating period agreed under the June ceasefire expired without a settlement, while Washington expanded sanctions on Iran and several insurers withdrew cover for vessels transiting the strait. With ships trapped in the Gulf, owners reluctant to transit and cargoes taking longer routes, the effective tanker fleet continued to shrink.

Tight availability, rather than oil demand, is driving earnings

Crude tanker earnings rose across all segments in August, reaching their highest average level since April despite the International Energy Agency cutting its 2026 oil demand forecast again. Suezmaxes were the standout performers, with average earnings rising around 40% month on month to approximately USD 240,000 per day in late August, broadly matching VLCC earnings despite being half the size. Their ability to transit the Suez Canal fully laden and access ports that larger vessels cannot reach has made them particularly valuable as trade routes remain disrupted. One-year timecharter rates also strengthened, with a modern Suezmax fixture approaching USD 95,000 per day near month-end. The willingness of charterers to commit at these levels points to expectations that tight conditions will persist.

The orderbook is growing, but relief is still some way off

An eventual normalisation of trade routes remains the clearest downside risk to today’s exceptional earnings. Longer term, the growing orderbook will provide additional supply, with crude tanker contracting in 2026 already at record levels and deliveries concentrated from 2028 onwards. However, more than a fifth of the crude fleet is now over 20 years old, meaning a significant share of new tonnage will replace ageing vessels rather than expand the trading fleet. This is already reflected in asset values: a five-year-old Suezmax is valued at around USD 108 million, compared with USD 130 million for a resale of a newbuilding (vessel out of yard). For owners of modern, compliant tonnage, the near-term outlook therefore remains well supported by limited deliveries and a shrinking pool of vessels available for unrestricted trading.

Sources: BIMCO, BRS Shipbrokers, Clarksons Research, CNBC, CNN, International Energy Agency, Lloyd’s List Intelligence & Straits.live