Will geopolitical sanctions or new ships shape the tanker market?

Return to Red Sea routes would cause a 2% to 3% demand reduction.

The tanker market is projected to end 2025 with mixed results in its subsectors amidst changes in global geopolitics.

In BIMCO’s Tanker Shipping Market Overview & Outlook, the company said the crude tanker market is expected to end the year with a balanced development in supply and demand growth despite weaker-than-expected cargo volumes.

Slow fleet growth, longer sailing distances and renewed cargo volume growth in the second half of the year are expected to ensure the balance, the report said.

Meanwhile, product tankers will end the year with a weakening of the supply/ demand balance as cargo volumes are expected to end lower than in 2024, whilst new ship deliveries have led to faster supply growth.

“Increasing oil production in the Americas and by members of the Organization of Oil Producing Countries (OPEC) is expected to lead to an even greater oil surplus, which should support demand for crude tankers as buyers take advantage of lower oil prices to rebuild inventories,” BIMCO said.

Renewed pressure on Russian oil exports due to new US, UK and EU sanctions could add new demand for mainstream tankers not included in the forecast. So far, sanctions on Rosneft and Lukoil have not dramatically reduced Russian oil exports, but there has been a tripling of Russian oil in floating storage.

The US increase of tariffs on Indian imports and sanctioning of Chinese oil terminals may prove the most effective in curbing Russian exports, the report said.

The Houthis have announced an end to their attacks on ships in the Red Sea as the Gaza ceasefire still holds. It has not yet led to a significant increase in tankers using Red Sea and Suez Canal routings.

BIMCO expects a 2% to 3% reduction in demand and a weakening of both tanker markets if tankers return to normal routings.

For 2026, BIMCO said the crude tanker supply/demand balance will be unchanged whilst a weakening is forecast for 2027.

“Another year of low fleet growth is expected to help ensure the balance for 2026. However, in 2027, increased ship deliveries of ships contracted in 2023 and 2024 is expected to drive supply growth higher and beyond the predicted demand growth,” it said.

Softening market conditions are projected in the next two years for the product tanker market.

“Increased fleet growth is forecast to drive supply growth to 5.5% year-on-year during both years. Given low oil demand growth, product tanker demand is not expected to be able to keep pace with supply,” BIMCO said.