The Most Extreme Shipping Market in History, Explained | J Mintzmyer on Why Oil Tanker Rates Are Up 25x and Why It Can’t Last (and Why Dry Bulk, not Tankers, is the Next Shipping Boom)

VLCC spot fixtures from the Middle East Gulf to China recently reached about $1 million–$1.2 million per day, roughly 25–30 times normal rates of $20,000–$40,000. Those headline rates came from only a few fixtures, not the whole fleet; a VLCC carries about 2 million barrels, and a round trip takes roughly 60 days. By September 30, 2026, the Strait of Hormuz was no longer fully closed, but some owners still avoided it. Mintzmyer estimated flows at 70–80% of pre-conflict levels, or 12–14 million barrels a day versus about 20 million, while warning that transit and AIS data were unreliable and conditions could shift quickly.

The tanker market was already tightening before the conflict began on February 28: forward fleet supply was exceptionally low, the fleet was old, and longer routes increased demand for ship capacity. Because shipping demand is measured in ton-miles, a longer voyage matters even if cargo volumes do not change. US Gulf-to-Asia trips are more than twice as long as Middle East Gulf-to-Asia voyages, while Russian oil routes around Africa and Red Sea diversions also add distance. Recent rates were about $1.1 million a day for voyages in or out of the Strait, versus roughly $500,000 from West Africa and $300,000 from the US Gulf. Mintzmyer attributed much of that gap to owners’ reluctance to enter the Strait and the need for vessels to be nearby.

Mintzmyer expects the most extreme rates to last days or weeks, not months. Tanker markets can move sharply on small supply-demand imbalances, but rates could fall as much as 95% if conditions normalize. He considers even $150,000–$200,000 a day unsustainable over the longer term and doubts $150,000 could persist beyond 12–18 months; $1 million a day is plainly unsustainable. Ships may keep operating until rates fall well below roughly $50,000–$60,000 a day. Product-tanker rates initially lagged crude rates, partly because those ships were more evenly distributed, but were rising by September 30. Mintzmyer sees potential for a catch-up, especially amid concern about diesel supply; a US diesel-export ban lasting months, however, would be very bearish for product-tanker rates.

Tanker ship prices are at all-time highs, above 2007–2008 levels and the highest Mintzmyer has seen in his 17–18 years in the industry. He estimated that a 10-year-old VLCC would need to earn about $150,000 a day for two to three years to justify its purchase price. Meanwhile, orders placed after the Ukraine invasion and another wave of panic orders are expected to bring significant new supply from early to mid-2027 through late 2028 or early 2029. The order book is not necessarily excessive across a 10-year cycle because older ships need replacing, but high rates discourage scrapping just as new ships arrive. VLCCs are difficult to operate beyond about 22.5 years; at normalized rates of $30,000–$60,000 a day, older ships are less likely to remain in service. Mintzmyer estimates that about 20% of the tanker fleet is in the dark fleet, and roughly a quarter of that segment may never return to regular service.

He is more cautious on tanker stocks than on company earnings: companies could do well if rates average $120,000–$130,000 a day for two or three years, but share prices can fall when rates turn down even if the businesses remain strong. He described his stance as mostly hold, not aggressive buying. He warned that BWET, which the host said was up more than 4,000% year to date, could lose 50%–75% or more if spot rates and forward freight agreements have peaked. Mintzmyer named Torm his favorite product-tanker company, citing its fleet, management, governance and distribution policy; he considers Hafnia solid but prefers Torm’s structure and fleet. For crude tankers, he cited Okeanos Eco Tankers’ modern assets and management results while noting its higher valuation and riskier-cargo exposure; he was not bullish on the stock and held no position.

Mintzmyer sees dry bulk as the more attractive shipping investment, provided there is no global recession or major adverse shock, such as oil reaching $200 a barrel. Capesize rates were around $40,000–$50,000 a day versus roughly $20,000 normally, with constrained supply and shifting trade routes supporting demand. China’s investment in Guinea iron-ore capacity could shift sourcing from Australia: Guinea-to-China voyages are more than three times as long, adding ton-mile demand even if imports stay flat. Asian dual-fired power plants switching from natural gas to coal as LNG prices rise are another source of support that Mintzmyer expects could last several years. The dry-bulk order book is only slightly above average, and an old fleet needs replacement, but a global recession or Chinese manufacturing crisis would hurt the sector.

CMB.TECH is Mintzmyer’s publicly disclosed top idea for 2026, and he remains long, though he finds its roughly $19 share price less attractive than the $8 level the previous fall. The company is selling most of its tanker assets, using about half the proceeds to repay debt and nearly half of the remainder for dividends. Its modern dual-fuel Newcastle Max vessels can earn $15,000–$20,000 a day above the benchmark, or about $60,000 against a $45,000 benchmark. Mintzmyer placed dry bulk around the fourth to sixth inning of a cycle and tankers around the fifth to sixth, while cautioning that cycle analogies are unreliable.