Multi-decade lows in global global stocks of crude and refined oil products will cause tanker demand to surge after the reopening of the strait of Hormuz to all commercial traffic, according to tanker owner International Seaways.
OECD crude inventories have declined by about 250mn bl since the start of the US-Iran war, falling to the lowest in 20 years, International Seaways chief executive Lois Zabrocky said Thursday on the company's third-quarter earnings call.
"Rebuilding those inventories will require significant volumes of oil to move around the world, providing an additional source of tanker demand even as geopolitical disruptions ease," Zabrocky said.
Even after a peaceful resolution to the US-Iran war that reopens the strait of Hormuz, buyers of Russian oil products would still need to source supplies from elsewhere, pushing replacement supplies onto medium range (MR) tankers from the US Gulf coast, she said.
"We're seeing something like half of the refineries in Russia are still offline," Zabrocky said. "So I think the US remains a really key supplier of barrels and that's pretty MR [tanker] preferred."
Crude oil production growth is also centered on the Americas, while consumption growth is driven "largely by the east", which will continue to support very large crude carrier (VLCC) rates on routes that have already rocketed to all-time highs in late 2026, Zabrocky said.
"We've had to change the scale of this chart to accommodate current VLCC rates, which have reached nearly four times the previous peak levels that we've seen over the past 35 years," she said during a presentation.
International Seaways' fleet generated record revenues of $443mn in the third quarter, up from $192mn in the same period of 2025. Its 10 VLCCs averaged a time charter equivalent (TCE) rate of $154,600/d in that period, up from $34,800/d a year earlier, while its 12 Suezmax tankers averaged a TCE rate of $102,500/d, up from $33,300/d. Its four Aframax tankers averaged a TCE rate of $57,800/d, its 10 long range 1 tankers averaged $51,100/d, and its 28 MR tankers averaged $35,400/d, all higher than year-earlier rates.
International Seaways profit in the quarter rose to $344.2mn from $70.5mn a year earlier. The company credited strong market fundamentals on rerouted vessel traffic, reflected in higher TCE returns, alongside a return of $74mn on the sale of a 2012-built Suezmax.
The company remains interested in selling additional older vessels while secondhand values remained elevated, chief commercial officer Derek Solon said.
