CIO Industry Guide
Still positive about tanker sector heading into 2025, particularly crude tankers, for which tonne-mile demand is expected at a firm 2.0% while fleet growth may be limited to 1.1% (Clarksons data). We believe Asia-led crude trade growth, especially from China, and global oil production are key drivers of tanker rates and earnings. We expect very large crude carrier (VLCC) time charter equivalent (TCE) rates to remain elevated in 2025 due to supply tightness, possibly even surpassing 2024 levels if China’s oil imports recovery exceeds expectations. In contrast, the product tanker market is likely to soften due to oversupply.
Soft demand, firm supply signal weaker container shipping rates ahead; tariffs present further downside risks. Clarksons projects a significant slowdown in TEU-mile trade growth (3% in 2025 vs. 18% in 2024) with fleet growth of 5% in 2025, leading to lower container freight. However, this should be partially offset by the ongoing Red Sea-related rerouting, which could prevent a sharp drop in rates similar to the post-COVID collapse. While higher US tariffs may provide a short-term boost to volumes and rates due to front-loading by retailers to avoid the potential upcoming tariffs on China, global container trade could shrink by up to 2.4% if Trump imposes a 60% tariff on imports from China and 20% on the rest of the world.
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