PodcastThe Monetary Matters NetworkJ Mintzmyer

The Most Extreme Shipping Market in History, Explained (and Why It CANNOT Last) | J Mintzmyer

Mintzmyer describes an exceptionally tight tanker market, driven by limited forward supply, an aging fleet, longer routes, and disruptions that can sharply raise ton-mile demand. He says current rates and valuations are extreme and unlikely to last, while new tanker tonnage is expected from 2027 onward. He sees potential in product tankers and dry bulk under specific conditions, but is cautious on container shipping and notes that recession, weaker Chinese manufacturing, or sharply higher oil prices could undermine the outlook.

Energy MarketsMarket ValuationsSupply Chains

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Key Takeaways

Mintzmyer says tanker freight has reached extraordinary levels: a 60-day VLCC round trip carrying roughly 2 million barrels could cost about $60 million at $1 million per day, versus normal daily rates of $20,000–$40,000. He attributes the market’s sensitivity to small cargo-versus-ship imbalances and says ships already near loading ports can command exceptional rates when oil needs to move on short notice.

Mintzmyer says tanker demand depends on ton-miles, not just global oil consumption: longer U.S.-to-Asia and Brazil export routes can increase demand even without growth in oil use. Red Sea diversions around the Cape can triple demand on affected routes, while Russia’s shift to sending oil to India around Africa adds further sailing distance.

Tanker equities are pricing in a couple of strong years, and Mintzmyer says current ultra-high rates may last only days or weeks; even $150,000–$200,000 per day would be difficult to sustain beyond 12–18 months. His purchase hurdle for a 10-year-old VLCC is about $150,000 per day for two to three years, though he says established companies could do well at average rates of $120,000–$130,000 over that period.

Mintzmyer points to an aging fleet and demanding survey requirements after 15 years as limits on tanker capacity: at normalized rates, he says VLCCs are unlikely to stay in service past 22.5 years, while a very weak market could prompt scrapping at 17.5. He estimates about 5% of the global tanker fleet may never return from the Dark Fleet, but also expects a significant wave of new tonnage from early or mid-2027 through late 2028 or early 2029.

MARKETS

VLCC Freight Costs — Mintzmyer says a 60-day VLCC round trip from the Middle East Gulf to China and back would cost about $60 million at $1 million per day, carrying roughly 2 million barrels. He contrasts that with normal tanker rates of $20,000–$40,000 per day. One-year charters for modern tankers recently ran around $150,000–$170,000 per day, versus normal annual charter rates of $25,000–$30,000.

“And so those tankers, they hold about two million barrels of oil. the VLCC's, the very large crude carriers…”—

Tanker Valuations — Tanker asset valuations are at all-time highs, above 2007–2008 levels. Mintzmyer says tanker equities are pricing in a couple of strong years, even as current fundamentals remain strong.

“The asset valuations, right? If you have high rates, high spot rates, high charter rates, you're going to see strong asset valuations. And those are at all-time record highs…”—

Tanker Ton-Miles — Mintzmyer attributes the tanker setup to generationally low forward supply, an aging fleet, and longer routes. Shipping demand is measured in ton-miles, so U.S. oil exports to Asia and Brazil’s long-haul exports can lift demand even without growth in global oil consumption.

“We had generationally low forward supply. The fleet was the oldest it had been in modern history. And we had promising demand trend shifts…”—

FORECASTS

Oil Demand Threshold — Mintzmyer says demand destruction would begin if oil rose to roughly $140–$150 per barrel. He says current prices are not yet at that level.

“Now, if we get higher, you know, 140 150, we start getting demand destruction, Jack. But we're not there yet.”—

Diesel Export Ban — If the U.S. imposed a diesel-export ban lasting several months, Mintzmyer thinks it would be bearish for product tanker rates. Rates might rise for a week or two during disruption and ship repositioning before a longer-lasting ban weighed on them.

“If the Trump administration does do a diesel export ban, which they've been talking about, they've been seriously considering it…”—

Tanker Rate Outlook — Mintzmyer says current ultra-high tanker rates are unsustainable and could last days or weeks rather than months. He adds that even $150,000–$200,000-per-day rates would be difficult to sustain beyond 12–18 months, while expecting tanker companies could still earn money in 2028.

“But the rates are absolutely unsustainable, Jack. I don't know if it's going to be a matter of weeks, but I wouldn't even say months…”—

Intro

Mintzmyer calls tanker conditions unprecedented: spot VLCC rates have topped $1 million per day, annual charter rates and vessel values are also at records, and he attributes the squeeze to tight supply and rising ton-mile demand.

Sarmaya $LENS Pre-roll

He traces tanker strength to an aging fleet, years of limited ordering, longer oil routes, sanctions, Red Sea diversions, and the war-related disruption that trapped ships and dislocated available tonnage.

The Historic Squeeze in Oil Tanker Rates for Shipping

The Sarmaya Lens sponsor segment describes its actively managed real-asset ETF as a way to add exposure to energy, metals, and other tangible assets amid inflation and geopolitical risks.

Strait of Hormuz (What's REALLY Going On)

Mintzmyer says AIS data in the Strait of Hormuz is unreliable, estimates flows have recovered to roughly 70–80% of pre-conflict levels, and explains how risk, naval protection, and ship availability shape transits and rates.

Sarmaya $LENS Mid-roll

China has resumed crude buying and refined-product exports as reserves and refinery activity shift; Mintzmyer says product tanker rates lagged crude rates but began catching up, with diesel supply especially important.

How Ships Are "Transporting" Through The Strait

Mintzmyer sees tanker rates as likely to fall from unsustainable extremes, considers vessel values richly priced, and distinguishes rate-sensitive exposure from equities that could remain profitable at lower rates.

China's Epic Return to The Oil Market Is A Complete Gamechanger

He favors Torm among product-tanker companies, criticizes Nordic American Tankers’ fleet and governance, and says many tanker stocks are holds or avoids despite strong management teams at some firms.

Product Tanker Rates Could Still Head Higher

Mintzmyer expects substantial new tanker deliveries from 2027 onward, while high rates are delaying scrapping; he says some dark-fleet vessels may return but the oldest or most compromised ships may be scrapped.

Is It Time To SELL Tanker Stocks? (J Says Perhaps It Is, He's Not Bullish, Rates Have Peaked)

He views dry bulk as the most attractive shipping segment if there is no global recession, citing moderate valuations, constrained supply, strong rates, and CMB.Tech’s tanker-asset sales and dividends.

Dry Bulk

Mintzmyer says container shipping has benefited from repeated disruptions but faces a large orderbook and a mature cycle; he prefers tanker trades only tactically and dry bulk for investment.

Sarmaya $LENS End-roll

Mintzmyer directs viewers to his shipping and energy research services, while the closing sponsor message promotes the Sarmaya Lens ETF and points to its prospectus and disclosures.

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Important Disclaimers

Not Investment Advice: For education only — not financial, tax or legal advice.

AI-Generated: Made by AI from source transcripts and may contain errors.

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