IF THERE is a consensus view in shipping about what comes next for the Strait of Hormuz, it is that nobody yet knows what the new normal looks like.

The most benign scenario for tanker markets would be a continuation of the gradual reopening now under way. Volumes recover, some inefficiencies persist, freight rates enjoy a temporary uplift and inventory restocking supports demand through the second half of the year. Better still, such an outcome would avoid wider damage to the global economy. That, at least, was the assessment from shipping markets analyst Stephen Gordon this week.

Beyond that, the outlook becomes harder to judge.

Energy security concerns remain unresolved and must now be added to an already crowded list of uncertainties: Red Sea diversions, Russian oil trade patterns, the growth of the sanctioned fleet, shifting US tariff policy, rising Guinea bauxite exports, VLCC consolidation and the direction of the Chinese economy.

Then there is the orderbook.

Between now and the end of 2028, the tanker market will absorb roughly one new VLCC and one new suezmax every week. By 2028, VLCC deliveries alone are expected to approach two vessels a week. Whatever happens in Hormuz, a shortage of ships is unlikely to define the market.

Demand is less straightforward. Inventory rebuilding may offer support, but tanker markets ultimately trade on tonne-miles. If Asian refiners substitute Atlantic basin barrels with Middle Eastern crude, voyage distances shrink and so does demand for shipping capacity. Freight rates may be elevated today, but history suggests spikes rarely last. At oil prices around $70 per barrel, freight costs of $15-20 per barrel are difficult to sustain.

The bigger question may be how much trade never fully returns to Hormuz.

Saudi crude exports are recovering towards pre-conflict levels, but not every additional barrel is moving through the strait. Riyadh continues to utilise its East-West Pipeline and Red Sea terminal at Yanbu. Aramco is unlikely to scale back those flows until Ras Tanura has demonstrated sustained reliability and confidence in Hormuz’s security is firmly restored.

The same logic applies in the UAE. Expansion centred on Fujairah long pre-dated the conflict, but recent events have reinforced the value of redundancy and alternative export routes.

Iraq’s ambitions to revive exports via Syria’s Banias route are more uncertain. Similar plans have repeatedly stalled, the infrastructure is decades old and the financial, political and security hurdles remain formidable. The idea cannot be dismissed, but scepticism remains warranted.

The Strait of Hormuz is unlikely to return to its pre-conflict status quo. The more important question is what replaces it — and how much seaborne trade ultimately chooses, or is forced, to find another way.

Richard Meade
Editor-in-chief, Lloyd’s List

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