Special Tanker Report: US-Iran Impact
We explain why we believe tanker stocks are ignoring the current rate boom.
Today’s report is a highly relevant one. As the title suggests, we are looking at tankers, which is the primary focus for the market right now. We anwser 3 key questions:
1) Why tanker stocks are not rising despite record spot rates.
2) Whether the current tanker market strength is temporary or structural.
3) Which stocks are best positioned to benefit from the current market.
We bring expertise and a track record in the tanker industry to the table. This is rare in North America. While shipping analysts are usually found in Norway, Denmark, or Greece, they are scarce in the US, and in Canada, they are basically non-existent.
We currently see an exceptional tanker market. As many of you recognize, spot rates have jumped even higher. A red hot environment defines tanker shipping, and momentum remains clearly positive. The gap between available vessels and cargo demand widens fast. Rates have broken through previous highs, creating a profitable environment for owners of compliant ships. Some might view the move as a short-term spike, but a closer look reveals a global balance where limited ship supply keeps earnings high.
Red Hot Spot Market
The VLCC route from the Middle East to China recently topped $78,000 per day, marking a 12% increase in a single week. Suezmax rates from West Africa to Europe trade near $62 000, while Aframax rates in the North Sea hold at $55,000. Detours around risky or blocked routes are lengthening voyages, reducing available ship supply and driving tanker rates higher.
Because the demand to move oil over long distances grows faster than the fleet, the base for daily earnings has moved to a much higher level. This setup should allow top shipping companies to capture a larger share of a tight market, as the low supply of ships for immediate hire keeps rates elevated.
Now for the interesting part. Why are tanker equities down or flat while spot rates go up like crazy? We intend to go deep into this explanation in the following sections. Trust us, you do not want to miss this.