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Xclusiv Shipbrokers Inc.: The past week has confirmed that the disruption in the Arabian Gulf is no longer just a supply shock but a market distortion

The past week has confirmed that the disruption in the Arabian Gulf is no longer just a supply shock but a market distortion that is beginning to erode demand itself. What initially supported freight through panic, dislocation and risk premiums is now evolving into something more complex: a shrinking cargo base, trapped tonnage and an increasingly fragmented tanker market.

On the crude side, the numbers are becoming difficult to ignore. With weekly volumes out of the Middle East Gulf down by as much as 65% and an estimated 100 tankers (>20.000 DWT) unable to exit the region (based on Signal Ocean Data), the market is effectively dealing with a logistical bottleneck rather than a pure shortage. The immediate reaction earlier this month — with extreme fixtures reported at record levels — reflected fear and scarcity. However, as days pass without a reopening of Hormuz, the reality is shifting toward lost earnings days, idle capacity and growing uncertainty around forward employment. This explains why forward expectations are already being revised down despite headline volatility. At the same time, policy responses are becoming increasingly unconventional. The US is now considering temporarily releasing up to 140 million barrels of Iranian oil already on the water, following a similar move on Russian cargoes. This is a clear signal that governments are prioritising short-term market stability over sanctions consistency. While this may ease prices in the near term, it also introduces a new layer of unpredictability, effectively blurring the boundaries of sanctioned trade and distorting normal market signals. What is perhaps more telling, however, is what is happening in the clean tanker space. Unlike crude, where dislocation can support tonne-miles, product tankers are facing a direct hit to demand. With Middle East Gulf refineries either damaged or unable to export, around 3.46 million barrels per day of product flows have been effectively removed from the market. The replacement volumes seen elsewhere — roughly 1 million barrels per day — are simply not enough to compensate. The result is not rerouting but contraction. This is already visible in vessel behaviour. LR and MR units are increasingly ballasting West, abandoning traditional East of Suez employment in search of alternative cargoes. While this initially supported Atlantic earnings, it is now creating the conditions for oversupply in the West. The early signs are there: rates remain historically strong, but momentum has clearly softened, particularly in the Pacific where earnings have corrected sharply from their peaks.

Overlaying all this is a sharp increase in bunker costs, which is acting as a further constraint on fleet mobility. With fuel prices surging and availability tightening, speculative repositioning becomes more expensive, effectively slowing down the system and reducing flexibility. This, combined with the growing imbalance between laden and ballast vessels inside the Gulf, is creating a market that is not only disrupted but inefficient.

Stepping back, the broader picture is one of a system under stress. The tanker market was already entering this period with an ageing fleet profile and limited immediate replacement capacity, a structural issue that remains in the background. What the current crisis has done is expose how quickly utilisation can break down when a key chokepoint is removed from the equation. For now, the market remains headline-strong but fundamentally fragile. The longer Hormuz stays effectively closed, the more the conversation will shift from freight spikes to demand destruction and utilisation losses. In that sense, this is no longer just a crisis of supply — it is a test of how much disruption the tanker market can absorb before its own fundamentals begin to weaken.

Dry S&P Activity:

Activity this week was spread across the Kamsarmax down to Handysize segments, with a notable presence of modern and resale candidates. On the Post-Panamax/ Kamsarmax sector, the "COPERNICUS N" - 93K/2010 Tsuneishi Zhoushan was sold for USD 12.35 mills, while the modern Kamsarmax "GIA INSPIRATION" - 85K/2022 CSSC Tianjin achieved USD 33.3 mills. The "MG MERCURY" - 83K/2016 Imabari was acquired by Far Eastern buyers for USD 28.5 mills, and the "LOCH LONG" - 82K/2013 Tsuneishi Zhoushan was sold to Greek interests for USD 23 mills. On the Panamax sector, Greek buyers acquired the "BARWON" - 78K/2015 Sasebo for low USD 26 mills. Moving to the Ultramax sector, the "JIN RUI" - 64K/2014 Jiangsu Hantong was sold to clients of Huaya Maritime for USD 24 mills, while the Supramax Tier II"HONY FUTURE" - 57K/2012 Xiamen changed hands at low USD 14 mills. Moreover, the "XO COPENHAGEN" - 58K/2010 Tsuneishi Zhoushan was sold to Chinese buyers for USD 16.3 mills, the "FIGEAC" - 53K/2011 Chengxi was sold for USD 13 mills, and the "PAPA JOHN" - 57K/2010 Qingshan achieved mid/high USD 13 mills. Finally, in the Handysize sector, three OHBS sister vessels, "JIANGSU DAJIN DJHC6404", "JIANGSU DAJIN DJHC6405" and "JIANGSU DAJIN DJHC6406" - 40K/2027 Jiangsu Dajin were sold enbloc for USD 90 mills.

Tanker S&P Activity:

Sinokor has now shifted its focus to the Suezmax segment, following its extensive VLCC buying spree which significantly supported both markets and asset values throughout 2026. Indicatively, the company committed about USD 83 mills for 10-year-old, South Korean-built Suezmax units, effectively driving benchmark prices for this age group up by roughly 10%. In this context, the "AEGEAN VISION" - 159K/2017 HHI was sold for USD 82, while the scrubber fitted "SILVERWAY" - 158K/2017 Sungdong was sold for USD 82 mills, both to clients of Sinokor. Furthermore, the "AEGEAN MARATHON" - 159K/2016 HHI was sold also to clients of Sinokor, at the same level of USD 82 mills, confirming the strong pricing appetite for modern Suezmax units. Finally, the vintage "NORDIC SKIER" - 159K/2005 HHI changed hands for USD 40 mills.

Xclusiv Shipbrokers Inc.