Venezuelan Oil Redirection Could Push Tanker Shipping Rates Higher
Potential redirection of Venezuelan crude oil exports could push tanker shipping rates higher in the near to medium term, as shipments shift from shadow tankers to the mainstream fleet, according to Fitch Ratings. Any similar shift of Iranian oil transportation from shadow tankers to mainstream vessels represents an additional upside risk, while key downside risks include the resumption of transit through the Suez Canal and slowing global economic growth.
Venezuela accounted for about 0.8% of global crude oil production in November 2025 and approximately 1% of global seaborne crude oil transportation, with most shipments destined for China. Under recent arrangements with the United States, seaborne Venezuelan oil is expected to increasingly move via mainstream tankers. While global oil volumes are unlikely to change rapidly, any significant rise in Venezuelan production and transportation will take time to materialize.
The redirection is expected to impact tonne-miles and increase demand for mainstream tankers. Oil displaced from Venezuela, potentially from other Latin American countries or Canada, will still require transportation by tanker, mostly to China, which could boost rates. This shift is likely to favor medium-sized tankers, while increased shipments from alternative regions, such as the Middle East to China, could benefit very large crude carriers (VLCCs). A substantial portion of Venezuelan-Chinese oil previously transported via shadow fleets moving to mainstream tankers would support overall tanker demand.
Iran, producing nearly 5% of global seaborne crude oil, also relies heavily on the shadow fleet due to sanctions. Any transition to mainstream tanker transportation would support rates, though political instability could reduce export volumes.
Tanker rates have already strengthened due to recent geopolitical developments. VLCC one-year time charter rates rose to over USD 60,000 per day in December 2025, significantly higher than most of 2025, while Suezmax rates have remained above USD 45,000 per day since November 2025. Rates continue to stay well above long-term averages, supported by increased tonne-mile demand from Russia’s war in Ukraine and other geopolitical factors. Volatility in Venezuela and Iran may prompt buyers to diversify oil sources, further benefiting tanker earnings.
The resumption of Suez Canal transit remains the main risk to global freight rates across shipping segments, including tankers and containerships. Most containership operators are gradually resuming transit, and a full normalization could offset gains from Venezuelan oil redirection.
Other factors supporting tanker demand include potential reductions in Russian crude exports, the shift from shadow to mainstream fleets, growth in oil inventories and floating storage, and the possible unwinding of OPEC+ production cuts, currently paused at approximately 3.2 million barrels per day. Seaborne oil trade increased in 2025 due to higher production from both OPEC+ and non-OPEC suppliers, resulting in a 3% rise in supply, with similar growth expected in 2026. Increased tonne-miles from Russian oil exports and Red Sea disruptions have kept overall tanker demand high since 2022, supporting global freight rates.
