Tanker shipping
Tanker shipping moves crude oil, refined products, and chemicals by sea — the largest seaborne trade by weight after dry bulk. The market divides into crude tankers (VLCC, Suezmax, Aframax) carrying unrefined oil from producing regions to refineries, and product tankers (LR2, LR1, MR, Handysize) carrying gasoline, diesel, jet fuel, and naphtha from refineries to consumers, with chemical/parcel tankers as a specialized adjacent trade.
How the market works
Most crude tanker business is fixed on the spot market, voyage by voyage, with rates quoted in Worldscale and converted to time-charter-equivalent (TCE) daily earnings. Oil majors and traders vet every ship rigorously (through SIRE inspections) before fixing. Earnings are extraordinarily volatile: the same VLCC might earn under $10,000/day in a slump and over $150,000/day in a spike, because both fleet supply and cargo demand are inelastic in the short run.
The great rate events illustrate the drivers: the 2020 contango episode, when collapsing oil prices made floating storage profitable and briefly sent VLCC rates above $200,000/day; and the reshaping of trade after Russia’s 2022 invasion of Ukraine, when sanctions redirected Russian crude from short European hauls to long voyages to India and China, absorbing tonnage-miles and spawning a large “shadow fleet” of aged tankers outside mainstream insurance and class.
Structure and regulation
Ownership is fragmented — Greek owners are the largest national group, alongside listed companies (Frontline, Euronav/CMB.TECH, and peers) and national carriers such as Bahri and COSCO Shipping Energy. The regulatory arc has been driven by casualty: Torrey Canyon (1967) led to MARPOL and the CLC compensation regime; Exxon Valdez (1989) produced the US OPA-90 and the double-hull mandate; Erika and Prestige accelerated single-hull phase-out worldwide.
The sector’s forward questions are demand-side — how fast oil consumption plateaus and declines — and technological: an ageing fleet, a historically small orderbook through the early 2020s, and the choice of future fuels for newbuildings.