Tanker

Tankers have seen extraordinary volatility over the last twelve months, with crude tankers the clear beneficiary. Sentiment built through the second half of 2025 and the market delivered into year-end and the opening months of 2026, when VLCC earnings reached levels that were exceptional by historical standards. Strength has not been uniform across the complex — mid-size crude tankers have often looked structurally tighter than VLCCs, supported by trade realignments and fleet segmentation, while VLCC rates have swung sharply as volumes, storage, and route choices shifted.

Looking ahead, geopolitics still dominates the turns of the market, but the medium-term is increasingly shaped by a tug of war between tight effective supply and incoming newbuild capacity. Crude fundamentals can remain supportive if incremental OPEC+ volumes materialise and trade flows stay dislocated, but peak-level rate prints look difficult to sustain if routing normalises and fleet growth shows up in available tonnage.

Equities have seen impressive returns year-to-date and are increasingly priced close to perfection, which introduces downside risk. Tactical opportunities are likely to materialise as headlines evolve, but sizing and horizon matter more than they did a year ago.

Product tankers benefited from strong conditions through much of the last year, but the setup is now less clean. Tonne-mile support has started to normalise as routing patterns stabilise, and the delivery schedule creates a clearer supply headwind for MR and LR segments. That makes the sector more sensitive to any easing in utilisation, even if underlying demand remains constructive.

Amidst this mixed demand picture, the large orderbook continues to loom over the market and dampen equity pricing. With a slew of vessel deliveries entering the market over the coming two years, the supply-demand balance is expected to deteriorate — though disruptions can continue to bring about profitability in certain periods.

Opportunities can still emerge through relative value between dirty and clean markets and through capital discipline if consolidation themes translate into tighter capacity management. Tactical trading opportunities exist, but the segment is not expected to provide durable returns over the coming year, with negative asymmetry in the risk-return ratio.