Back on June 29, we published our Shipping Memo arguing that the downturn in shipping was temporary following the partial “reopening” of the Strait of Hormuz. We argued rates (and our tanker equities) had fallen too far as markets overreacted to the reopening. We also expected 2026 to remain a strong year for tankers, with sentiment turning as the fundamentals caught up.
Since then, VLCC spot rates, the rates paid to very large crude carriers, have skyrocketed, reaching levels far above what we were seeing at the time.
With Iran still blocking Hormuz and targeting vessels trying to transit, and now the Houthis entering the party, tanker transits are at their lowest levels.
So, what does this mean for our tanker equities?
Fewer tanker transits are tightening vessel supply and pushing spot rates higher, which is highly positive for tanker equities.
Shipping is a cyclical sector. We are staying quick on our feet for any signs that the cycle is turning and are ready to adjust our positioning. Right now, we believe the fundamentals show a clear picture: more gains in tanker equities are ahead.
We update our price targets on our tanker equities and dive into what we see as the best-positioned sectors.
Table of Contents
Crude Oil Tankers
1.1 Rates Continue to Surge
1.2 The Fleet is Getting Older
Dry Bulk Carriers: One to Watch
2.1 Rates & Demand
2.2 A Not-So-Young Fleet
Our Two Highest-Conviction Holdings
3.1 Oil Tanker
3.2 Product Tanker
Our Final Thoughts