The capacity surge is coming for the tanker sector with new research suggesting 2026 is on track to see the highest amount of tanker newbuild orders on record. The first four and a half months of the year already represent the fifth highest total amount of tanker orders this millennium according to investment bank Evercore ISI. “[O]wners just can’t let the golden goose be, and we’re getting a clearer line of sight at the end of the current boom (assuming an eventual end of Middle East hostilities) courtesy of an ordering spree that may also set a record,” Evercore ISI stated in a new report published this week. Becky Smart, a research analyst at Sentosa Shipbrokers in Singapore, said there was now a real risk of overcapacity hitting the tanker markets with the sector set to grow by 11% in dwt terms by the end of 2027, far outpacing the latest figures on oil demand growth at 1-2% over the same period. “This chasm in growth forecasts will only get more severe the longer the Hormuz situation goes on for, tempering oil demand growth, and triggering wider economic ramifications,” Smart told Splash today. However, she cautioned that the situation is more nuanced, and the tanker market thrives where there are inefficiencies, which could support a large influx of tankers. “Whilst on paper looking at the bare figures, oversupply looks very likely,” Smart said, adding: “However, when contending with the realities of the tanker market, geopolitics, sanctions, ageing fleets, rerouted trade flows, it may be surprising the amount of new tonnage the market can absorb before freight rates take a hit.” The extreme amounts of tankers ordered recently will lead to a “meaningful negative balance to develop longer term leading to a potential downcycle”, analysts at Breakwave Advisors warned in a recent report. Playing down the overcapacity risk of all the recent ordering, Ralph Leszczynski, who heads up research at broker banchero costa, said the sector is now 20 to 25 years from the great fleet renewal driven by the single hull tankers phase-out due to legislation at that time, which means that a lot of currently trading tankers are now in that 20-25 years range which is naturally due for demolition and replacement. Moreover, there is a huge overhang of tankers which should have been demolished long ago but have been kept trading in shadow trades from Russia, Iran and Venezuela. However, these are mostly old and poorly maintained vessels which have no hope of returning to mainstream compliant trades, therefore as soon as the rationale for such shadow trades disappears, most of these vessels will be forced into demolition, and instead modern and compliant tonnage will be needed in their place. For the time being, tanker rates are at unprecedentedly elevated levels, something Alex Saverys, CEO of CMB.TECH, one of Europe’s largest shipowners touched on today while delivering his company’s Q1 results. Saverys described the tanker markets as “red-hot”, going on to say: “We don’t know how long this Goldilocks moment will continue amidst many uncertainties surrounding global trade and a growing orderbook.” Source: Evercore ISI googletag.cmd.push(function() { googletag.display('div-gpt-ad-1_95_0_1_2'); });