Supply/demand balance In our base scenario, we forecast a slight tightening of the crude tanker market in 2025 followed by a weakening in 2026. Our forecast indicates weakening of the product tanker market during both years. We now assume that ships will gradually return to normal Red Sea and Suez Canal routings throughout 2025. Although the ceasefire between Israel and Hamas may still be fragile, Houthis have ceased attacks on all ships except those linked to Israel. The resulting shorter sailing distances significantly impact our demand forecast for the product tanker market. In the alternative scenario, the tightening of the crude tanker supply/demand balance in 2025 is stronger as supply growth is weaker. The weakening of the product tanker market is less pronounced in the alternative scenario, but supply growth still outpaces demand growth during both 2025 and 2026.

Supply growth is lower in our alternative scenario as we assume that ships in the parallel fleet sanctioned by the US will leave the active fleet during the first half of 2025. In both scenarios, we assume that Russia will continue to export crude oil and oil products at or near the levels seen during 2024. The impact of President Trump’s agenda on the tanker market remains mostly unknown. Initiatives such as peace talks with Russia, maximum pressure on Iran and increased US import tariffs all have the potential to drive tanker market changes. So far, only the impact of China’s response to increased US tariffs on Chinese imports appears clear. The 10% tariff on import of US crude oil likely shifts Chinese imports from US to the Middle East and/or Canada causing tonne miles to reduce. The reduction may be countered by

Macro environment

We now assume that there will be a gradual return to normal Red Sea and Suez Canal traffic during 2025. The Gaza ceasefire agreed between Israel and Hamas has increased the likelihood that ships may return to normal routings via the Suez Canal earlier than we previously assumed. The latest attack on a ship was in November 2024, and the Houthis have announced that as a result of the ceasefire, they will limit attacks to ships with links to Israel. So far, this has not however led to an increase in tanker traffic via the Red Sea and Suez Canal. In addition to the development in the Red Sea, policies pursued by the US during both the Biden Administration and since Donald Trump took office add uncertainty and obscure the outlook. In early January, the Biden Administration implemented extensive new sanctions on the Russian oil industry and the ships that have exported Russian oil and oil products. It is too early to conclude what the full effects of these sanctions will be.

However, it is clear that pressure on Russian oil exports has increased as the Shandong Port Group in China confirmed that it will bar sanctioned tankers from its ports and the Indian oil secretary said that India only wants to buy oil supplied by companies and ships that are not sanctioned by the US. For now, Russia appears able to maintain exports at or near normal levels as unsanctioned ships previously not involved entered the trade. Since Donald Trump took office, he has pursued new policies which have potential impact on the tanker market. He announced tariffs on oil imports from Canada and Mexico but has since delayed implementing them. Increased tariffs on imports from China have gone ahead, which has led China to retaliate by applying a 10% tariff on oil imports from the US.

In addition, President Trump initiated negotiations with Russia about peace in Ukraine without the participation of neither Ukraine nor the EU. In addition, he promised to apply “maximum pressure” on Iran while the US sanctioned two more tankers that carried oil from Iran. Both initiatives have potential consequences for the tanker market but as the outcomes are not yet known, it is too early to estimate the exact impact. Last but not least, President Trump announced the intention of pursuing so-called “reciprocal tariffs” whereby the US will apply the same tariffs on imports from a country as US exports face in that country. As this policy has not yet been implemented, it is obviously too early to evaluate the impact on the tanker market.

However, even if it does not hurt the tanker market directly, the policy could still hurt global trade and economic growth. Compared to when we released our November 2024 report, the International Energy Agency has increased its oil demand forecast for 2025 by 0.2 million barrels per day (mbpd) while reducing its supply forecast by 0.6 mbpd. The IEA raised demand expectations for Europe, Russia and India while supply forecasts were lowered for Russia, Africa and the Middle East. The supply forecast does not account for the unwinding of OPEC+ production cuts, and OPEC+’s latest plan for unwinding adds 0.4 mbpd to supply in 2025. The IEA reduced its refinery throughput forecast by 0.1 mbpd compared to November.

The forecast still points to increasing throughputs, except in developed economies in the Americas, Asia and Europe. Emerging and developing economies also drive demand growth, with China, India and the Middle East being the main growth areas. It is, however, noteworthy that China is no longer the main driver of demand growth. The IEA’s forecast does not yet include forecasts for 2026. The U.S. Energy Information Administration (EIA) forecasts a 1.0 mbpd increase in demand. It is, however important to note that the EIA forecasts demand growth of 1.4 mbpd in 2025 whereas the IEA forecast points to growth of only 0.9 mbpd.

The EIA forecasts that crude oil prices will fall by USD 6/barrel in 2025 and another USD 8/barrel in 2026 with Brent prices forecast at USD 75/barrel and USD 67/barrel respectively. The International Monetary Fund updated its forecast for growth in the global economy in January. Compared to its October forecast, it lifted global economic growth in 2025 by 0.1 percentage point to 3.3% while maintaining 2026 growth at 3.3%. Compared to the October forecasts, expectations for growth in the US and China increased while they reduced for the European Union. Of the world’s five largest economies, the forecast predicts that only the economies in the European Union and Japan will grow faster in 2025-2026 than in 2024. Global manufacturing activity as measured by Purchasing Managers Index (PMI) has remained mostly stable in recent months. Manufacturing PMI in China also remained stable around the 50 mark, whereas activity in the eurozone remains particularly weak. The OECD’s Composite Leading Indicator, that indicates the GDP growth trend in economies 6-9 months ahead of time, moved upwards for all but one of the largest five economies. For Japan, the indicator moved below 100, predicting growth below trend. For China and the US, the indicator improved significantly during the past six months. For China, however, it remains close to 100, indicating growth in line with trend.
Source: BIMCO