“The Strait of Hormuz was effectively closed for three months, trapping hundreds of ships and thousands of sailors in the Persian Gulf while dramatically reducing the volume of global seaborne oil tankers,” says Nils Rasmussen, senior shipping analyst at BIMCO.
Since it is not known when ships can safely return to the strait, we offer two forecast scenarios. The first, “SoH open”, assumes that the strait will fully reopen before the end of the second quarter while the other, “SoH open”, assumes that the strait will remain effectively closed throughout 2026 and 2027.
Since the start of the Iran War, dirty and clean tanker cargo volumes have declined by 13% year-on-year. Despite pre-war growth in shipping volumes, year-to-date shipping volumes have fallen by 5% year-on-year, equivalent to a decline of 340 million barrels in the dirty tanker market and 147 million barrels in the clean tanker market.
To cope with the shortage of oil supplies, oil inventories were released at a record pace. JPMorgan estimates that 800 million barrels can still be released without compromising what is needed to maintain minimum pipeline and storage tank levels.
“If the Strait of Hormuz remains effectively closed, oil inventories may reach critical levels by the end of September and may not be able to provide a secondary source of oil supply,” Rasmussen says.
On the other hand, rebuilding global oil inventories could provide additional growth in tanker demand once ships can once again safely transit the Strait of Hormuz. The International Energy Agency estimated that up to 1 million barrels per day may be needed for three years to rebuild stocks.
The ability of Saudi Arabia and the UAE to shift oil exports to Red Sea and Gulf of Oman ports has been invaluable in avoiding further declines in global oil supplies and demand for dirty oil tankers. This allowed Saudi Arabia to maintain approximately 60% of its pre-war exports even though 90% of exports are usually exported from Persian Gulf ports. Likewise, the UAE was able to maintain more than 70% of its pre-war export volume.
After an initial rise in freight rates at the beginning of the war, spot freight rates in most major trade lanes returned to levels similar to those recorded before the war. Freight rates for Persian Gulf exports remain high but are mostly theoretical due to the small number of ships transiting the Strait of Hormuz.
“If the Strait of Hormuz reopens before the end of the second quarter, we expect cargo volumes to gradually grow during the third quarter, normalize in the fourth quarter, and return to growth in 2027, supported by inventory rebuilding. Given the high fleet growth, the supply-demand balance for product tankers may weaken in 2027. If the Strait remains closed, we expect cargo volumes to decline as oil inventories are depleted,” Rasmussen says.
Source: BIMCO
