The Beginning of the End (Take 3)

04 December 2025 E.A. Gibson Shipbrokers Ltd

Once again, negotiations are ongoing to end the war in Ukraine. Back in August we wrote the second iteration of this report, after President Trump and Putin’s first face to face meeting in the former’s second term. That meeting yielded little progress, however, the most recent push for peace has seemingly taken us closer to an end to the war in Ukraine than at any other point since its outset. Negotiations are ongoing, and the initial 28-point plan proposed by the US was countered by a 19-point plan between the US and Ukraine, which Russia was not a part of. Still, as before, the path to peace remains uncertain and it is unclear to what extent trading relationships can revert to pre-war patterns.

Historical demand impact

Tanker tonne miles (crude/DPP/CPP) grew 5.4% in 2022 following the invasion and by 7.2% in 2023 after the implementation of the European/US embargo on Russian oil and oil price cap framework. Whilst not all this growth was attributable to the war, the majority was, particularly in 2023. Tonne mile growth has since slowed, gaining just 1% in 2024, and contracting 1% for the year to date.

Global Crude, DPP, and CPP Tonne Miles

Source: Gibsons

European position

It remains heavily debated whether trade flows might return to “normal” in the event of a peace deal. The current leaders of the UK, France, and Germany, as well as the Baltic and other EU States might try particularly hard to prevent a swing back to Russian energy trade, especially in the event of a “bad deal” for Ukraine. The recently published 28-point plan sets out to reintegrate Russia into the global economy whilst fully lifting sanctions. However, it was reportedly produced without European input. Further, it is unclear what the 19-point counterproposal contains as well as whether Europe had a hand in writing it, let alone Russia. Thus, it remains unclear what the European towards Russia and its energy exports will be.

If it is assumed that any deal is likely to involve sanctions relief, then some normalization in trade flows is possible. The key, however, would be whether European refiners are allowed to return to Russian crude supplies. If this were to be the case, then over time trade flows might shift to resemble something similar (but not the same) as their pre-war patterns.

Next year, European refining throughput will be 500kbd lower than in 2022, as closures in Germany are likely to offer reduced scope for Russian pipeline flows to return to previous levels. Equally, other producers (notably the US) have captured market share in Europe and will need to be displaced. On the CPP side, tanker tonne miles surged as Europe scrambled to replace Russian supplies in 2023 with cargoes from the Middle East, India, and the United States. At the same time, Russian cargoes which typically traded into Europe were pushed to new markets in Latin America, Africa and Asia creating substantial inefficiencies to the benefit of tanker owners and traders. Refining margins in Europe (and worldwide) also benefitted initially and would likely come under pressure if Russian supplies return to Europe, and especially if Ukrainian drone strikes on Russian refineries cease. As a result, we could see lower long-haul imports. The overall impact would be significantly lower tonne miles.

As such, in terms of tonne miles, the reaction of European leaders is of utmost importance. If Europe lifts its current embargo on Russian oil, this will have significant negative implications for tanker demand.

View Full Report Here

How we can help:

1. Submit your requirement - A member of the team will reach out within 24 hours.

2. Book a call with the team - Explore which of our 200+ data and analytics solutions align with your needs.

Click here to subscribe on LinkedIn: https://lnkd.in/exwPBCNG