Tanker boom may be near its peak, analysts warn

Tanker earnings have reached exceptional levels, but analysts disagree on how long the boom will last. Investment bank Evercore ISI expects very large crude carriers (VLCCs) to earn an average of $476,000 per day in the fourth quarter of 2026. However, it warns that high rates may not continue as oil demand weakens and more tankers enter the market, Splash 247 reports.

Evercore expects average VLCC earnings to fall to $115,000 per day in 2027. It links the current boom largely to tensions in the Middle East. Other analysts are more optimistic, pointing to low oil inventories and an ageing fleet.

There are also signs that high freight rates are changing trade patterns. Some Asian refiners are choosing shorter routes from the Middle East instead of buying oil from the Atlantic, reducing demand for long-distance voyages.

The supply outlook adds to concerns. Tanker deliveries are expected to rise sharply in 2028 and 2029, while very few older VLCCs are being scrapped. At the same time, Evercore forecasts a fall in global oil demand in 2026.

The bank also warns that shipping costs now account for around 25–30% of the value of the oil being transported. Such high costs could reduce demand further, putting pressure on tanker earnings.

 

Picture: Shutterstock