Disruption in the Strait of Hormuz poses a risk of a prolonged decrease in global tanker demand.

Maritime disruptions in the Strait of Hormuz are altering global oil trade patterns, potentially leading to reduced tanker demand, even as alternative routes partially mitigate declines in shipping volumes by increasing ton-mile demand, according to industry analysts.

Oil-on-water levels, which gauge tanker demand, have decreased significantly. In April, these levels fell to 1.07 billion barrels, down from 1.24 billion barrels in January and below the three-year average of 1.16 billion barrels, as reported by S&P Global Commodities at Sea.

Both dirty and clean tanker volumes dropped by 13% in the ten weeks since the onset of conflict in the Middle East, compared to the previous ten weeks and the same period last year, according to shipping association BIMCO on May 28. Year-to-date, volumes in both sectors are down by 5% compared to 2025, representing a loss of 340 million barrels for dirty tankers and 147 million barrels for clean tankers, as per BIMCO.

Lois Zabrocky, CEO of International Seaways, noted on May 7 that some of the disruption was mitigated by alternative flows, such as increased Red Sea exports, inventory draws, and the release of Russian barrels that had been at sea. However, she pointed out that these sources have not fully compensated for the volumes typically transported through the strait, and the market is currently adjusting to these changes.

Following the conflict's outbreak on February 28, freight rates rose and remain higher than pre-war levels. On May 26, the Platts VLCC index for non-scrubber-fitted vessels reached $278,717 per day, significantly above the average of $75,881 per day since the index's inception in March 2024.

After an initial surge, rates have stabilized.

Energy security concerns are expected to carry broader implications for global energy markets as disruptions through the Strait of Hormuz continue, according to Zabrocky.

On the positive side, Lars H. Barstad, CEO of Frontline, stated on May 22 that the trade lane inefficiencies caused by the conflict might persist due to growing concerns about energy security. He emphasized a future increased focus on energy supply security.

The conflict has led to unprecedented supply disruptions in the global oil market, with the Strait of Hormuz, which usually carries about 20% of global oil consumption, now experiencing significantly reduced traffic, as reported by the International Energy Agency on March 20.

Fatih Birol, executive director of the IEA, warned on May 21 that the world might reach a "red zone" for oil supplies by July or August, given the ongoing disruptions and rapid depletion of global inventories.

Regarding demand, analysts at S&P Global CERA noted on May 17 that a substantial global oversupply of tanker capacity relative to cargo demand remains the primary factor weighing on tanker market outlooks.

In the Americas, although Aframaxes may have hit a temporary low, VLCCs are expected to experience continued rate declines into June due to persistent oversupply, according to the analysts.

They added that the West of Suez market is heavily dependent on the ongoing movement of ballast ships to the Americas to eventually tighten European supply and prevent further declines.

Markets in the East of Suez remain highly unpredictable, as noted by the analysts.

If disruptions through the Strait of Hormuz persist into 2026 and 2027, BIMCO's alternative scenario predicts a contraction in crude tanker demand by 11% to 13% in 2026 and an additional 8.5% to 10.5% in 2027.

BIMCO stated that the longer the strait remains closed, the more market expectations will align with this forecast.

Under BIMCO's base-case scenario, which assumes the strait will reopen before the end of June, crude tanker demand is projected to decline by 4% to 6% in 2026, with a rebound of 6.5% to 8.5% in 2027.

Even with a potential reopening within the second quarter, BIMCO cautioned that the overall supply-demand balance may weaken in both markets in 2026, while there could be an improvement in the crude tanker market in 2027, though the product tanker market might weaken further.

Fleet supply growth for crude tankers is expected to range from 0% to -1% in 2026 and 5% to 6% in 2027, while product tanker capacity is forecasted to grow by 4.5% to 5.5% and 7% to 8% during the same periods, as noted by BIMCO.