Participants at a late-March panel in New York said the tanker shipping market has become exceptionally tight as the disruption caused by the closure of the Strait of Hormuz continues to distort vessel positioning and trade flows.
The event, held at the midtown offices of Norton Rose Fulbright and organised by New York Maritime and Young Shipping Professionals of New York, brought together shipowners, analysts and market specialists to assess how the crisis is reshaping freight markets. Moderated by Kevin O’Hara of Fearnley Securities, the discussion covered insurance, cargo logistics, supply chain issues and the political and legal backdrop.
Erik Broekhuizen of Poten & Partners said Asia is far more dependent on Middle East crude than Atlantic basin markets, meaning it could face shortages sooner and be forced to compete more aggressively for replacement barrels. He explained that when the conflict began, vessels were not positioned for alternative movements into Asia, which is why Suezmaxes and Aframaxes ended up being fixed to the Far East on routes that would normally be handled by VLCCs. Once VLCC availability dried up, he said, the market had to use whatever tonnage was available.
That dislocation has played directly into freight strength. Broekhuizen said the market is very tight because of the shift in vessel positioning and warned that if the Strait of Hormuz remains closed, wider consequences will emerge elsewhere in the world.
In the product tanker segment, Peter Sullivan of Scorpio Tankers said key Gulf-to-East trades had been heavily disrupted, particularly for naphtha. With those flows reduced, replacement cargoes are increasingly being sourced from Europe and the United States, meaning Western suppliers are filling some of the gaps left in the East. He said vessel demand for those moves has risen sharply.
Sullivan added that the US Gulf is also sending more distillates to African destinations, including East Africa and South Africa, routes traditionally served by the Middle East. Jet fuel flows have also been affected, he said, pointing out that Europe imports roughly 40% to 50% of its jet fuel from the Middle East. He noted that some cargoes are already moving from the US Gulf to Europe and said more could follow if the disruption continues.
Jeff Pribor, CFO of tanker owner International Seaways, said the company had been fortunate not to have vessels in the Arabian Gulf when Operation Epic Fury began. He also recalled a conversation with a charterer seeking to load in the Gulf, saying that crew welfare was treated as the top priority and that the charterer quickly backed away once the risks were considered.
A few days after the panel, and roughly one month after Operation Epic Fury began, President Donald Trump addressed the conflict in a 1 April speech. While many analysts felt the speech offered little in the way of new information, it did include a more nuanced position on the Strait of Hormuz. Trump noted that only minimal volumes of Arabian Gulf oil actually move to the United States and suggested that countries more dependent on crude transiting the strait may need to take a larger role in ensuring cargo can continue to pass.
That issue has become increasingly central to the market. Windward said in a late-March report that Iran appeared to be managing a limited number of transits through what had become a controlled, permission-based corridor with selective access and emerging denial patterns. Separate reports suggested Tehran could introduce a tolling arrangement, while Iran later announced a possible framework with Oman for handling traffic through the strait.
