The ceasefire in the Red Sea could have a significant impact in the product tanker market. In its latest weekly report, shipbroker Gibson said that “the latest ceasefire between Israel and Hamas has again raised hopes of a normalisation of Red Sea transits for commercial shipping. Earlier this week, the Houthis announced a pause to attacks on commercial shipping provided the ceasefire holds. Whether this will be enough to convince mainstream shipowners as well as insurance companies that the Red Sea is safe to cross so far remains highly uncertain. If the Red Sea is once again seen as a safe route, how would that impact tanker markets?”
According to Gibson, “large scale rerouting via the Cape of Good Hope has especially affected the clean tanker trade. 2024 saw over 90% of clean volumes from the Arabian Gulf and West Coast India to Europe sail around the Cape, giving a significant boost to clean tonne miles and freight rates, with LR2s the main beneficiaries. Later in the year, VLCCs and Suezmaxes started cleaning up and cannibalising this trade, which saw freight rates drop significantly. Whilst this trend has moderated since, Suezmaxes especially have continued…