Strait of Hormuz Disruption Boosts Oil Tanker Profits – but Signals Looming Market Risks
The closure of the Strait of Hormuz, a chokepoint that normally carries about one‑fifth of global oil shipments, has created a stark contrast for the tanker sector. While the blockage has driven freight rates to historic highs, it has also prompted a rapid expansion of new‑building orders that industry veterans warn could sow the seeds of a future downturn.
Profit Surge in Q1 2025
According to Clarkson’s, the world’s leading shipping broker, oil tanker owners recorded profits of US $36 billion in the first quarter of 2025. This figure eclipses the previous quarterly record of US $26 billion set in 2022 and reflects a windfall generated by the effective strangling of the strait since the conflict began in February 2024.
Impact of the Strait Closure on Shipping Rates
The disruption forced more than 160 oil tankers to linger in the Gulf, tightening supply and pushing charter rates upward. At the height of the early‑war panic, the average daily rate for a standard tanker peaked at US $162,992, while the very largest vessels—capable of moving roughly two million barrels per day—reached US $386,685 per day.
As market participants began to anticipate a possible reopening, rates have retreated to a band of US $55,000–$95,000 for the biggest ships. Although still above the long‑term average of US $30,000–$40,000, the decline signals that the speculative premium is already unwinding.
Fleet Expansion and Boom‑Bust Concerns
Buoyed by the short‑term windfall, owners have directed a substantial share of earnings toward new‑building contracts. Data from maritime analytics firm AXSMarine show that the number of largest oil tankers ordered in 2025 has already surpassed the total ordered in any full year on record.
This surge has revived fears of a classic boom‑and‑burst cycle. Alexander Saverys, CEO of CMB Tech—one of the largest listed shipping groups—warned:
“There is a certainty that it will crash at some point… the market has ordered far too many ships. This will come back to bite us at some point.”
Similar concerns were echoed by Harry Vafias, a major owner of gas and oil tankers, who noted that considerable capital has been tied up in both second‑hand and new vessels, leaving the industry exposed if freight rates fall sharply.
Industry Perspectives on Future Outlook
While many executives anticipate a correction, others argue that the current ordering spree reflects a genuine undersupply that has persisted since the pandemic‑era slump. Maria Angelicoussis, managing director of the Angelicoussis Group, explained:
“If I look at the tanker market, there has been an increase in newbuilding orders in the recent past, but this comes after a period in which there was a shortage of ships.”
Capital Maritime Group, controlled by Greek tycoon Evangelos Marinakis, has also placed a sizable newbuilding order, citing the need to replenish an aging fleet.
Some analysts suggest that geopolitical shifts could permanently alter routing patterns, thereby supporting higher rates even if the Strait of Hormuz reopens. Angeliki Frangou of Navios Partners pointed out that national‑security considerations—such as securing reliable energy supply chains—might temper the impact of excess capacity.
Context: Who Dominates the Tanker Market?
Veson Nautical’s shipping technology analysis reveals that Greek shipowners control the bulk of the global oil tanker fleet, with a combined working‑fleet value of US $66.4 billion—roughly US $26 billion more than the combined holdings of Chinese operators.
This concentration means that decisions made by a relatively small number of Greek‑based families and companies can have outsized influence on global freight markets.
Conclusion
The Strait of Hormuz episode has delivered a remarkable profit bonanza for oil tanker owners, yet it has also triggered a rapid expansion of capacity that history suggests could precipitate a market correction. Stakeholders are balancing the immediate gains against the longer‑term risk of oversupply, while monitoring diplomatic developments that could restore normal traffic flows. As the industry watches for signs of a reopening, the prevailing sentiment remains cautious optimism tempered by hard‑won experience of previous boom‑and‑bust cycles.
