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 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 benefitted from the Hormuz closure, which curtailed available shipping tonnage and drove up spot freight rates, while also boosting sale prices of its older vessels.
Even if the blockage does not end, the shift of freight tonnage towards the Atlantic is already weighing on rates, Saverys said, as ships that previously traded through the Persian Gulf reposition themselves to ship oil from places like the US, 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 US 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)
