The global tanker market resembles a massive seesaw, with geopolitical volatility on one end and economic fluctuations on the other. Venezuela's recent efforts to "legitimize" its crude oil exports now threaten to disrupt this delicate balance. Will this prove to be a temporary ripple or evolve into a market-altering tsunami?
Venezuela's Transformation: From Shadows to Spotlight
Fitch Ratings reveals a significant shift: Venezuela's crude exports are gradually abandoning clandestine "shadow tankers" in favor of mainstream shipping channels. As of November 2025, Venezuela accounted for merely 0.8% of global crude production and 1% of seaborne trade, with China as its primary destination. However, following a U.S.-Venezuela agreement, this pattern is changing dramatically.
This transition mirrors an unlicensed vendor suddenly obtaining proper credentials—requiring new equipment and operating openly. While Fitch cautions that substantial production increases and corresponding shipping volume growth will take time, the structural shift alone has already sent ripples through tanker markets.
Trade Flow Reshuffling: Identifying the Beneficiaries
The dual phenomena of changing ton-mile demand and the shadow-to-mainstream fleet transition promise profound market impacts. Oil previously substituted by Venezuelan crude (or from other Latin American and Canadian sources) must now reach China via conventional shipping routes, creating firm support for freight rates.
Medium-range (MR) tankers stand to gain initially from this redistribution. Imagine dividing a large cargo previously requiring VLCCs into multiple smaller shipments—like slicing a cake to serve more guests. Simultaneously, potential increases in Middle Eastern crude exports to China could boost demand for very large crude carriers (VLCCs), ensuring large tankers maintain relevance.
The Iran Factor: A Potential Market Catalyst
If Venezuela's changes represent minor adjustments, Iran's crude exports could deliver seismic shifts. Accounting for nearly 5% of global seaborne crude trade—far surpassing Venezuela—Iran's potential return to mainstream tankers would substantially bolster conventional fleet demand.
Yet the situation remains precarious. Iran's exports heavily depend on shadow fleets under strict sanctions. Political instability could abruptly disrupt shipments, creating unpredictable market volatility—a veritable powder keg for tanker markets.
Soaring Rates: Understanding the Drivers
By December 2025, VLCC one-year time charter rates surpassed $60,000 daily—well above annual averages—while Suezmax rates stabilized above $45,000 since November. These remarkable figures stem from post-Ukraine conflict ton-mile demand expansion, compounded by volatility from Venezuela and Iran, forcing buyers to diversify sources and further stretching shipping distances.
The Suez Canal Paradox
The waterway's resumed operations present a double-edged sword. For tankers, normalized transit may partially or completely offset freight benefits from Venezuela's trade flow reorganization—a development that could simultaneously reduce costs and suppress rate growth.
Additional Market Supports
Several other factors reinforce mainstream tanker demand:
• Potential Russian export reductions may shift shadow fleet capacity to compliant vessels
• Supply disruptions and price drops may spur inventory rebuilding and floating storage
• OPEC+'s currently paused 3.2 million bpd cuts weaken supply constraints amid market gluts
Market Outlook: Sustained Demand Growth
2025 saw approximately 3% maritime trade volume growth from OPEC+ and non-OPEC production increases, with similar 2026 projections. Combined with extended Russian exports and Red Sea disruptions elevating ton-mile needs, tanker markets maintain historically strong demand since 2022.
Venezuela's export normalization undoubtedly introduces new variables, but whether these evolve into transformative forces remains uncertain. Market participants must vigilantly monitor geopolitical developments and macroeconomic trends to navigate these turbulent waters successfully.