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By Mathias de Rozario and Jerome Terroy
May 19 (Reuters) – The tanker market is booming, but whether reopening the Strait of Hormuz would send freight rates soaring or crashing is still uncertain, the head of Belgian tanker firm CMB.Tech (CMBT.BR) said on Tuesday.
One of the prevailing views is that a reopening would trigger a restocking rush and overwhelm available tanker supply, sending rates sharply higher, CEO Alexander Saverys told Reuters, after his company tripled its first-quarter core profit as the disruption drove up freight rates and vessel prices.
Saverys, however, cautioned that markets may be underestimating how slowly oil exports from the Middle East would resume while overlooking the volume of vessels that would quickly return to availability, which could create an oversupply and send rates lower.
CMB.Tech, rebranded from Euronav in October 2024, has benefited from the Hormuz closure, which curtailed available shipping tonnage and drove up spot freight rates, while also boosting sale prices of its older vessels.
Graphic showing the evolution of the VLCC spot freight rates from the Middle East to China, Europe and the U.S. Gulf
Even if the blockage does not end, the shift of freight tonnage toward the Atlantic is already weighing on rates, Saverys said, as ships that previously traded through the Gulf reposition themselves to ship oil from places like the U.S., Brazil and West Africa.
As a result, rates have come off their peaks, though vessels are still earning $80,000 to $120,000 per day, Saverys said.
Another open question is how long the strong U.S. export volumes, driven by large releases of oil reserves, can be sustained, he added.
Reporting by Mathias de Rozario and Jerome Terroy in Gdansk, editing by Milla Nissi-Prussak
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