TThe global shipping market is going through the second quarter of 2026 under the weight of an unprecedented geopolitical shock. The virtual closure of the Strait of Hormuz, now in its third month, has radically reshaped trade flows and earnings dynamics across all sectors. With no credible solution in sight, and reports that the US military is preventing ships from exiting the strait, market uncertainty shows no signs of abating.
Tanker profits reached record levels in the first quarter of 2026, with Aframax values reaching all-time highs in May. Bulk carriers have shown impressive resilience and container markets have remained broadly stable, while the LPG market has seen significant disruption to trade flows.
Across all sectors, how the conflict evolves from here will be the defining variable for the rest of 2026. The duration of the Hormuz shutdown, the pace of any oil supply recovery, and how markets adapt to fundamentally changed trade routes will have direct consequences for usage, profits and asset values across the fleet.
Vectors
· Earnings for supertankers averaged about $175,000 per day in the first quarter of 2026, record quarterly levels, as the closure of the Strait of Hormuz removed nearly 25% of global seaborne oil trade from the market.
· A two-week ceasefire between the US and Iran, announced in early April, is on the verge of collapse, adding a significant new layer of uncertainty for market participants.
· Tanker order books now represent 20% of the total fleet, with negative actual fleet growth in 2026 before exceeding demand growth from 2027 to 2029.
Bulk
· The bulk market defied typical seasonal weakness in the first quarter of 2026, with average capital volume reaching around $23,000 per day, up approximately 75% year-on-year, driven by strong demand for Chinese imports.
· The gradual ramp-up of the Simandou iron ore mine in Guinea, with much longer sailing distances to China, provides significant structural ton-mile compensation over the forecast period.
· Demand growth of approximately 2.7% per year over 2026-2029 is expected to outpace supply growth of 3.3% per year as ordered ships enter service in 2027 and 2028.
Containers
- Container earnings were broadly stable in Q1 2026, with Red Sea diversions and limited ship availability providing support even as Asia and North America shipping volumes fell 7.4% in January 2026 due to tariff headwinds.
- Demand growth for twenty-foot equivalent miles is expected to reach 1.4% in 2026, capped by weaker volumes on the Asia-Europe and Asia-North America routes, before recovering to average growth of about 4% per year from 2027 to 2029.
- The order book stands at 36.6% of the current fleet, with freight rates expected to fall by 25.2% on average over the forecast period.
mystification
· The closure of the Strait of Hormuz removed nearly 30% of global LPG supplies from the market, with VLCC earnings averaging about $75,000 per day in the first quarter of 2026, up 56% year-on-year.
· Nearly 25% of global ammonia exports come from the Middle East, and the ongoing conflict is expected to delay the growth of seaborne ammonia trade in the near term.
· US LPG exports are expected to grow by 7.1% in 2026, although large fleet deliveries are expected to weigh on the market balance from 2027.
Source: Faison Bahri
