BIMCO Sees Strong Crude Tanker Market, Flags Recycling Risk

Low ship recycling activity could undermine tanker market strength in the coming years, BIMCO said in its February 2026 Tanker Shipping Market Overview & Outlook, even as crude tanker earnings are expected to remain firm in the near term.

“We expect continued strong market conditions for crude tankers in 2026 and 2027 despite some weakening in 2027. On the other hand, we forecast that the product tanker market will weaken during both years as fleet and supply growth accelerates,” said Niels Rasmussen, Chief Shipping Analyst at BIMCO.

According to the International Energy Agency, global oil demand is set to grow by 0.9 million barrels per day (mbpd) in 2026, while supply is projected to rise by 2.4 mbpd, with oversupply peaking at 4.1 mbpd in the second quarter of 2026.

The U.S. Energy Information Administration expects faster demand growth of 1.2–1.3 mbpd annually during 2026–2027 and supply growth of 1.6 mbpd in 2026 and 0.9 mbpd in 2027. The agency forecasts oversupply peaking at 3.2 mbpd in the first quarter of 2026.

“Due to the oil oversupply, the EIA forecast that the average price of Brent will fall from USD 69/barrel in 2025 to USD 58/barrel and USD 53/barrel in 2026 and 2027 respectively. That is likely to support continued inventory expansion during 2026. Currently, US/Iran tensions have, however pushed prices above USD 70/barrel,” Rasmussen said.

BIMCO said inventory expansion should continue to support crude tanker demand and may offer product tankers increased opportunities in the dirty tanker segment. However, the association warned that inventory builds could end in 2027, potentially shifting to drawdowns.

Geopolitical risks remain a factor. BIMCO noted that while the Strait of Hormuz has never been fully closed, escalating U.S./Iran tensions could disrupt flows, with around 30% of global seaborne oil exports potentially affected.

Sanctions-related developments could also influence fleet dynamics. Venezuelan oil exports have shifted to the mainstream fleet, and any reduction in Russian or Iranian exports could provide further support to conventional tankers.

Fleet growth remains a key concern. Since BIMCO’s last report, crude tanker order book capacity has increased 24%, while the product tanker order book has risen 5%. The order book-to-fleet ratio stands at 18% for crude tankers and 19% for product tankers.

“To mitigate the projected weakening in market conditions, recycling activity in the coming years will need to rival historic highs. A substantial pool of recycling candidates exists, as vessels aged 20 years or more account for 18–22% of total capacity across the two fleets. Recycling may, however, be constrained by restrictions on the sale of sanctioned vessels, which represent 29% and 59% of the capacity of the older crude and product tanker fleets, respectively,” Rasmussen said.