The Tonnage Math Behind a Hormuz Reopening
- 1 day ago
- 2 min read
18 June 2026 Vortexa
A Hormuz reopening is unlikely to trigger an immediate VLCC tonnage squeeze, as ample ballast capacity is already positioning towards the MEG, whereas diverting ballasters from the Atlantic could further add to the tally.
There has been a lot of discussion on whether a potential Strait of Hormuz reopening could provide a significant upside on freight rates, specifically for VLCCs. Even setting the current baseline to understand from which rates will increase or decline is challenging, as VLCC rates reported west of Hormuz aren't necessarily reliable given the illiquidity of deals.
This piece sets out our view on the tonnage and cargo dynamics behind that question, and quantifies the conditions under which Atlantic-bound VLCCs would find it worthwhile to divert back to the Middle East Gulf.
From a vessel demand perspective, regional infrastructure is expected to take several months to normalise, while MEG crude inventories (excl. Iran) remain below 5-year seasonal ranges. Cargo enquiries however could carry a wider booking window than usual, which could provide employment support that propagates through to rate uplifts in other regions, such as the Atlantic Basin.
To better understand how the situation in the Gulf is likely to unfold, it helps to look at the tonnage picture. Any near-term spike in rates is unlikely to be driven by a shortage of tonnage, at least in the crude segment, and to the extent one occurs, it should be short-lived. Mainstream ballast VLCCs are rushing toward the MEG. VLCCs in the Pacific not currently heading toward the Atlantic Basin are sitting at levels in line with pre-war averages, while the number of VLCCs located in East Asia, though still below 2-year averages, is rising — implying the pool available to load from the MEG should keep expanding over the next two weeks.
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