Most macro analysts spend a lot of time trying to predict fluctuations in the price of oil.
I’ve never really been that interested in it.
There is obviously a lot of money to be made trading oil, but for me it’s too dependent on events, too short-term and too speculative.
That’s not really how I like to invest.
But the ships transporting that oil?
That’s much more interesting.
Tankers are a much more long-term and cyclical business. Ships get old. Regulations change. At some point, fleets need to be replaced. And because building new ships takes time, these cycles can become relatively predictable.
So today, we’re going to talk about tankers — the ships that transport crude oil and refined petroleum products around the world.
And when I say this business is cyclical, the basic idea is actually very simple.
When a lot of oil needs to be transported and there aren’t enough ships available, freight rates go up.
When too many new ships arrive, freight rates collapse.
But something unusual is happening to this cycle today.
The global tanker fleet is getting old.
Across the major tanker categories, around 18–21% of the fleet is already more than 20 years old.
Looking at the broader tanker fleet, more than 21% of tankers above 25,000 tonnes are at least 20 years old, while another 28% are between 15 and 19 years old.
Normally, many of these ships would gradually be scrapped and replaced.
But the war in Ukraine and the sanctions that followed created something very unusual:
a second global tanker fleet.
Hundreds of older tankers are now being used to transport Russian, Iranian and Venezuelan oil outside traditional Western markets.
S&P Global estimates that this so-called shadow fleet now represents around 22% of the global tanker fleet.
And this is where things get interesting.
We effectively have two markets:
GLOBAL TANKER FLEET
┌── Compliant fleet
│ Western insurance
│ Major oil companies
│ Normal financing
│
└── Shadow / sanctioned fleet
Russia / Iran etc.
Older vessels
Limited Western access
Sanctions can therefore paradoxically reduce the effective supply of tankers available to the traditional market, even though those ships still physically exist.
At the same time, oil shipping routes have become longer and less efficient.
Imagine a tanker that used to need 25 days to complete a trip and now needs 45.
That ship is occupied for much longer.
You haven’t removed a single tanker from the global fleet.
But you have effectively reduced the amount of transportation capacity available.
This is the basic idea behind something called ton-mile demand.
What matters isn’t only how many barrels of oil need to be transported.
It’s also how far each barrel has to travel.
So let’s summarize all of this very simply.
Imagine you have a fleet of 100 tankers.
A significant number of them are getting old. Another part of the fleet is now being used to transport sanctioned oil. And at the same time, shipping routes are getting longer.
You don’t necessarily have more oil to transport.
But suddenly, you need a lot more tanker capacity to transport the same amount of oil.
That’s the important part.
And when the utilization of the remaining ships gets high enough, freight rates don’t necessarily rise gradually.
They can explode.
And that’s basically what we’re seeing today.
Despite what is happening with the price of oil itself, geopolitical disruptions and longer shipping routes have kept tanker freight rates at extremely high levels.
That’s what I like about this thesis.
We don’t really need to predict whether oil will trade at $60, $80 or $120.
We just need to understand how much oil needs to move, how far it needs to move, and how many ships are actually available to move it.
But if you’ve followed the thesis this far, you probably already see the obvious problem.
You might be thinking:
“Okay Pierre, if there aren’t enough tankers, shipowners will simply order more of them... or they probably already have.”
And that’s exactly what’s happening.
In 2026, tanker orders exploded.
By the end of July, shipowners had already ordered 96.4 million deadweight tonnes of new tanker capacity this year.
That’s more than the previous full-year record.
And if you look at the total tanker orderbook today, it represents more than 30% of the existing fleet.
That’s a lot.
Actually, when we first started looking at these numbers, this almost seemed to kill the entire thesis.
If almost one new tanker is already on order for every three tankers currently operating, where exactly is the shortage?
But this is where the story gets more interesting.
Because that 30% number tells us how many ships are coming.
It doesn’t tell us what they’re replacing.
Remember what we saw earlier.
A huge part of the tanker fleet is already old.
More than 20% of the broader fleet is over 20 years old, and another large part is quickly approaching that age.
So a significant part of this enormous orderbook isn’t necessarily creating new capacity.
It’s replacing capacity that eventually has to disappear.
And there’s another problem.
Those old ships aren’t disappearing as quickly as you might expect.
Why?
Because freight rates are high.
If you’re the owner of a 20-year-old tanker that can still generate a lot of cash, you’re not necessarily going to send it to a scrapyard tomorrow.
You’re going to keep operating it for as long as you reasonably can.
And this creates a strange situation.
Tanker supply gets tight
↓
Freight rates increase
↓
Old tankers become more profitable
↓
Owners delay scrapping them
↓
The fleet gets even older
↓
More replacement will eventually be needed
So now we have two forces moving in opposite directions.
On one side, a massive wave of new tankers is coming.
On the other, we have one of the oldest tanker fleets in decades, a large shadow fleet absorbing older vessels, longer shipping routes increasing ton-mile demand, and relatively little scrapping because old ships are still making money.
And that’s where I think the thesis becomes much more interesting.
Because the question isn’t really:
“Is there a global tanker shortage?”
That’s too simple.
The real question is:
Which parts of the tanker market are actually facing a shortage — and which ones are about to get too many ships?
Because not all tankers are the same.
VLCCs, Suezmaxes, Aframaxes and product tankers have different fleet ages, different orderbooks, different delivery schedules and different exposure to global trade routes.
And once you start looking at the market this way, the picture becomes much more interesting.
So we went through the tanker market segment by segment.
We looked at the age of the existing fleet, how many new ships are coming, when they’re actually going to be delivered, how much capacity could eventually need to be scrapped, how sanctions are affecting available supply, and which parts of the market benefit the most from longer shipping routes.
And most importantly:
which public companies are actually positioned to benefit from all of this.
Today, we’re launching a new live portfolio on Altis Terminal built around this thesis.
In the Premium section, we’ll go through the complete research, identify where we think the most interesting supply-demand imbalances are, look at the listed companies exposed to them, their valuations and risks, and explain every position we’re adding to the portfolio.
Macro Notes Premium members can also follow the portfolio live on Altis Terminal as the thesis evolves.
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The Real Opportunity Starts Here
So far, we’ve established something important.
The tanker market looks tight.
The fleet is old, sanctions have removed a large number of vessels from the traditional market, trade routes are getting longer, and freight rates have exploded.
But at the same time, shipowners have already ordered a huge number of new tankers.
And that’s where the easy version of the thesis ends.
Because the real opportunity isn’t simply:
“There aren’t enough tankers.”
Some parts of the market could actually end up with too many ships.
Others look very different.
In the Premium section, we’re going to break the tanker market down segment by segment — VLCCs, Suezmaxes, Aframaxes and product tankers — to understand where the real supply-demand imbalance is hiding.
We’ll look at:
how old each part of the global fleet really is;
how many new ships are coming and when they will actually be delivered;
which segments have the biggest replacement problem;
why modern tankers can already be worth more than brand-new ships still waiting to be built;
how sanctions and the shadow fleet are changing effective supply;
why longer Atlantic-to-Asia oil routes could structurally increase tanker demand;
which parts of today’s record freight rates are structural, and which are simply driven by current geopolitical disruptions;
and the biggest risk to the thesis: the enormous wave of newbuilds coming in 2027–2029.
Most importantly, we’ll identify the five public companies we believe are best positioned for this cycle, explain why we chose each one, look at their current valuations, balance sheets, fleet exposure and risks, and show the exact weights we’re using.
We’re also launching a new Tanker Replacement Cycle portfolio on Altis Terminal, where Premium members can follow every position, trade and future update to the thesis in real time…