BIMCO forecasts steady freight rates for crude tankers, product tankers to falter

Shipping industry body BIMCO predicts stable to firm freight rates for crude tankers in the second half of 2025, while product tankers struggle with shorter sailing distances and more vessel supply, it said Aug. 28.

Due to lower ton-mile demand, both sectors have seen lower rates and prices in 2025 so far than a year ago. No ship segment has been immune, but VLCCs have performed better than other crude tanker segments, while no product tanker segment has performed noticeably better than the others, BIMCO said.

Platts, part of S&P Global Energy, assessed the rate to carry a 270,000 mt cargo of crude from the Middle East to China at $14.42/mt on Aug. 28, up 28% on the year. By contrast, Platts assessed the rate to carry a 90,000 mt cargo of refined products from the Persian Gulf to UK/Continent at $41.67/mt on Aug. 28, down 12% on the year.

BIMCO analysts expect a balanced supply and demand for crude tankers, lifting demand growth forecast by 0.5%. They expect that the increasing oil surplus can drive 2026 demand growth 0.5% higher than previously expected.

Lower oil prices will drive some stockbuilding of oil and oil products, and BIMCO duly lifted its cargo volume growth forecast for 2026 for both crude and product tankers.

Global oil demand will rise by 630,000 b/d in the third quarter of 2025, primarily driven by seasonal gains in transportation and power generation sectors, analysts at S&P Global Energy said Aug. 28. On an annualized basis, global oil is projected to grow by 700,000 b/d in 2025 and 780,000 b/d in 2026, they said.

Crude carriers look to larger distances

In the crude tanker segment, the uptick primarily hinges on longer sailing distances, particularly as production from regions like the Americas and the Middle East rises. The US and Brazil are expected to lead the charge in the Americas, while Saudi Arabia and the UAE are set to bolster supply from the Middle East.

Conversely, the product tanker market faces a more challenging environment. The growth forecast for product tanker cargo volumes remains tepid, with projections of between a 0.5% decrease and 0.5% rise in 2025 and growth of 0.5% to 1.5% in 2026. This sluggish demand is attributed to shorter sailing distances, as an increasing number of product tankers navigate the Suez Canal, leading to a decline in average voyage lengths. The result is a market that may struggle to keep pace with the growth in vessel supply.

An increase in ships transiting the Suez Canal has contributed to the reduction in product tankers' average sailing distance. The ratio between deadweight transiting the Suez Canal and the Cape of Good Hope has year-to-date increased to 1.44 from 1.09 in 2024, a relative increase in Suez Canal transits of 33%, BIMCO said.

The balance between Suez Canal and Cape of Good Hope transits has been more stable for crude tankers. Compared to 2024, year-to-date the ratio between Suez Canal and Cape of Good Hope transits has decreased by 14%, BIMCO said.

Affecting West of Suez product tankers, the opening of the 650,000 b/d Dangote refinery in Nigeria has meant that cargo volumes on product tankers to the country have dropped 78%, BIMCO said.

For crude tankers, vessel supply growth is forecasted at 0.5% in 2025 and 1.5% in 2026. The Suezmax and VLCC segments are expected to drive this growth, although a slight reduction in the Aframax fleet is anticipated due to heightened recycling activity.

The product tanker market is projected to see a more significant supply increase, with growth rates of 3.5% in 2025 and 6.5% in 2026. This surge is largely attributed to a robust order book and the delivery of new vessels.