Donald Trump taking the White House in next week’s US elections would have a big impact on tanker markets, BRS Shipbrokers said.
Both Trump and Democratic Party challenger Kamala Harris appear prepared to try to ease tensions in the Middle East, which could see an end to Houthi attacks in the Red Sea and the return of tankers to the Suez Canal, BRS said.
But they differ in their approach to Iran, with Republican candidate Trump likely taking a harder line.
BRS said: “Although [Trump] has stated that he would ‘get a deal’ with Iran rapidly, it is anticipated that this would be achieved by enforcing existing sanctions and potentially introducing new ones to choke off their revenues, most of which come from oil.”
That would put 187 of the so-called dark fleet vessels — or the 132 VLCCs, 29 suezmaxes and 26 aframaxes lifting Iranian oil and other illicit cargoes — in the firing line, as Trump would look to tighten sanctions enforcement, the broker said.
As it stands, Iran is exporting about 1.6m barrels per day of crude oil and greater enforcement action could cut that down to 1m bpd.
“This should be a positive development for mainstream tanker demand,” BRS said. “If 600,000 bpd of Iranian oil is lost to international markets — essentially China — then the remainder of Opec+ would likely increase supplies to compensate.”
Some of those suezmaxes and aframaxes could end up in Russia trades, but BRS said that appears well-supplied, pushing more ships to the breakers.
But on the downside, a second Trump presidency might hurt US oil exports as he favours tariffs to boost US manufacturing.
This would likely affect US oil exports to China, even as those exports are on an upward trend from the current levels of 300,000 bpd, given Chinese refinery capacity.
“Therefore, any tit-for-tat trade war with China would not only threaten today’s US crude exports but also medium-term growth where incremental tonne-miles from the US re-projected to be a big contributor to global VLCC tonne-mile demand,” BRS said.
Polling shows Trump and Harris neck-and-neck nationally, with the race especially close in several battleground states such as Pennsylvania and Wisconsin.
US election day is 5 November.
