CSC has released a report stating that the fundamental logic of the oil shipping industry is changing, with the inventory ratchet effect becoming a core characteristic. Under the risk of geopolitical supply chain disruptions, countries are reassessing their energy security baselines, leading to an elevation of safety stock target thresholds that are unlikely to return to pre-crisis levels. This shift breaks the previous lean operation model of low inventory and high turnover.
While oil-producing nations tightening exports may temporarily suppress freight rates, this action effectively forces consumer countries' inventories into warning zones. Although export restrictions by multiple oil-producing nations have caused periodic adjustments in freight rates, they persistently push available inventories in overseas consumer nations toward safety alert ranges.
CSC points out that supply chain disruption anxiety, combined with inventory replenishment needs, could become a core catalyst for rising freight rates if concentrated releases occur. Beyond routine replenishment, overseas end-users are also building high-level safety buffer stocks. If these combined replenishment demands are released intensively due to policy easing or during peak seasons, they could drive significant increases in oil shipping rates.
CSC's main views are as follows: The oil shipping industry is undergoing important changes in its fundamental logic, primarily manifested through the emergence of the "inventory ratchet effect." The industry previously widely adopted lean operation models with low inventory and high turnover. However, under the impact and potential threats of extreme supply chain disruption risks such as Hormuz Strait blockades, countries have fundamentally reassessed their energy security considerations. Similar to a ratchet mechanism, energy safety stock targets elevated by geopolitical concerns are unlikely to return to pre-crisis levels.
Recent frequent tightening of crude oil export policies by multiple oil-producing nations, while suppressing shipping cargoes and causing periodic freight rate adjustments in the short term, are actually continuously pushing available inventories of overseas crude oil consumers toward safety warning ranges.
Supply chain disruption anxiety, coupled with inventory replenishment needs, could become the core catalyst for freight rate increases when concentrated releases occur. Under strong expectations of supply chain disruptions, overseas crude oil end-users will not only need to complete routine replenishment for daily consumption but will also increase capital investment to establish high-level safety buffer stocks. The combined demand from both routine replenishment and safety stock replenishment driven by elevated inventory safety thresholds, if released intensively during policy marginal easing or approaching peak seasons, will become the core catalytic factor driving the next round of significant freight rate increases in the oil shipping industry.
Outlook: Pressure on freight rates doesn't come from new supply, but from Red Sea navigation resumption. Global industrial relocation remains a trend variable, with the major migration from China-Japan-Korea to Southeast Asia to Africa/Middle East/South America bringing freight rate differentiation. In the macro narrative of global container shipping markets, industrial relocation is no longer simple "factory relocation" but a profound supply chain reconstruction becoming a key trend variable influencing future freight rate movements.
Supply chain "lengthening" has triggered fundamental changes in trade flows. The traditional point-to-point model of "East Asia production, Europe-America consumption" is gradually evolving into a multi-node relay model of "China-Japan-Korea (R&D/core components/intermediate products) - Southeast Asia/Mexico (assembly processing) - global market (final consumption)." This transformation has led to explosive growth in intermediate goods trade. For the shipping industry, this means pure finished product transportation demand is being decomposed into more complex regional transportation needs, greatly supporting the freight rate resilience of Asian regional routes.
The rise of the "Global South" is reshaping the value of non-main routes. As industries spill over from East Asia to Africa, the Middle East, and South America, these regions are transforming from pure resource exporters into emerging manufacturing bases and consumer markets. Middle East, Latin America, and Africa routes are benefiting from infrastructure investments and consumption upgrades, with China's exports to these regions no longer being just daily necessities but higher value-added engineering machinery, photovoltaic components, and new energy vehicles. This migration brings significant "structural differentiation" in freight rates.
Looking forward, Europe-America main routes will become increasingly mature,陷入"存量博弈" with freight rate fluctuations mainly suppressed by macroeconomics and new vessel deliveries, potentially exhibiting low volatility and low margin characteristics. Meanwhile, north-south routes and emerging market routes, due to relatively backward port infrastructure, relatively restrained capacity deployment, and demand growth outpacing supply, will more easily experience high freight rate premiums caused by congestion or demand explosions.
2026 container capacity delivery is only 1.5 million TEU, with nominal capacity growth rate approximately 3.7%. Global container fleet capacity delivery for 2026 is projected at 1.5 million TEU, the lowest value in the past three years. However, the real pressure depends on whether the Red Sea can resume normal navigation. The Red Sea crisis has damaged about 10% of container shipping fleet capacity. Once Red Sea navigation resumes, it will cause significant port congestion in the short term but will create substantial pressure on freight rates in the medium to long term.
2027, 2028, and 2029 are expected to deliver 3.1 million, 3.7 million, and 1.6 million TEU capacity respectively, casting significant shadows over the market for coming years. Currently, the proportion of vessels over 15 years old in the industry is 33%, while vessels over 20 years old account for 13%. If the market can effectively retire vessels over 20 years old within the next five years, a cliff-like decline might be avoided.
Container port congestion will become normalized. In the post-pandemic era, we must accept the fact that port congestion is no longer a sudden "black swan" but a "gray rhino" embedded in the global shipping system. Looking ahead to 2026, congestion will evolve from a simple terminal operation issue to a structural normalization, rooted in deep mismatches between ship and shore coordination: massive container fleet deployment versus port capital expenditure shortages.
The "pulse effect" from vessel gigantism and the "flood peak effect" from deliveries are approaching terminal limits. As 24,000 TEU ultra-large container vessels intensively enter operation, terminals face not uniform cargo flows but instantaneously bursting massive flood peaks. Single vessel calls bringing sharply increased loading/unloading operations cause yard density to reach saturation quickly. Although quay crane operation efficiency is improving, yard turnover rates and collection/distribution system bottlenecks are difficult to break through short-term. This hardware mismatch of "large vessels, small ports"注定作业效率的波动将成为常态.
New alliances' "hub-and-spoke" networks intensify hub port vulnerability. New transportation networks represented by "Gemini" in 2025 significantly reduce direct call ports, instead relying heavily on the transshipment capacity of core hub ports like Shanghai and Singapore. While this model improves trunk route utilization, it also concentrates risks highly. Once a hub port stops due to weather or strikes, chain reactions will quickly paralyze regional supply chains through feeder networks. Hub port "堰塞湖" phenomena will repeatedly occur.
Non-market factor disruptions are becoming long-term. Whether periodic strikes caused by European and American port unions resisting automation, or increasing port closure frequency due to extreme climate, effective port operation time is continuously compressed. Port congestion will no longer be simple capacity shortage but system elasticity loss. For the market, this normalized congestion somewhat acts as a "passive capacity control" role, absorbing some excess capacity but making "punctuality rate" the most expensive scarce resource.
In summary, the 2026 container shipping market faces significant downward pressure, with Red Sea navigation resumption becoming a decisive factor. US fiscal deficits and interest rate cut policies may hedge some market decline, but this might not be sufficient to support comfortable prices for shipping companies. Low oil price operations also provide favorable opportunities for the industry, but this could become a reason for industry price wars. We believe the 2026 container shipping market will face considerable pressure overall, with route structure differentiation further intensifying, and port congestion becoming a long-term issue.
Oil shipping is gradually moving toward compliance-driven growth. The Russia-Ukraine conflict has changed global crude oil supply patterns. Due to Russian oil constraints, EU and other countries have significantly reduced dependence on Russian oil, with Russian oil转而向亚洲区域供给. Meanwhile, the US, Brazil and other oil-producing nations are expanding production, while some African countries exit OPEC, leading to gradually decreasing OPEC market share,反而给其他国家留下了增产的市场空间.
Entering 2025, OPEC changed its previous production cut strategy转向增产, entering substantial production increase phases. Although production increases未必代表海运原油出口量的增加,实际海运贸易量数据 observed since August确实增加, effectively driving substantial increases in crude oil tanker freight rates.
Although China's seaborne crude oil imports were weak in 2024 and early 2025, recent monthly trends have been stronger, with third-quarter import volume increasing 5% year-on-year. Robust refinery throughput has provided additional impetus for import volumes. 2025 averaged approximately 14.8 million barrels per day of crude oil processing, up 3% year-on-year, with third-quarter processing volume increasing 7% year-on-year. Fuel oil and asphalt import tax increases in the first half of this year supported this momentum, prompting independent refiners to process more crude oil. Growing demand for petrochemical raw materials has also played a supporting role, while refinery maintenance plans have reduced in recent months, especially at state-owned plants.
Significantly accelerated inventory activities and increased refinery throughput have driven stronger import demand. Increased Chinese shipping volumes have also provided potential support for this year's crude oil tanker market. China's crude oil inventory available days have increased to 110 days, with strategic petroleum reserves plus commercial inventories increasing 150 million barrels so far, valued at approximately $10 billion. Future projections indicate increases to 140-180 days, mainly due to: (1) current oil prices at historically relatively low levels providing strategic purchasing windows; (2) new Energy Law effective 2025 requiring state-owned and private enterprises to jointly undertake strategic reserve obligations, creating institutional accumulation momentum; (3) approximately 20-30% of oil imports coming from countries sanctioned by Europe and America, creating supply disruption risks, with increased reserves preparing for potential crises including geopolitical situations; (4) substantial current account surpluses providing foreign exchange funds for crude oil purchases.
Continued refinery capacity expansion (projected to exceed 18 million barrels per day by 2026) supports crude oil demand. Sustained inventory momentum may support import volumes through 2026, with state-owned oil companies further increasing crude oil storage capacity by 169 million barrels, while further oil price slowdowns may also provide support. China's seaborne crude oil imports were initially projected to grow 3% to 10.7 million barrels per day next year, but further upside potential exists.
Due to expanded European and American sanctions on shadow fleets, particularly since early 2025 when the US intensified shadow fleet sanctions, effective market capacity has shrunk, pushing up freight rate centers and increasing freight rate elasticity during peak seasons. Currently, about 16% of the VLCC fleet belongs to restricted vessels, with Aframax vessels closely related to Russia reaching 33%. Although newbuilding prices have recently declined somewhat, overall secondhand vessel transaction values continue rising, somewhat related to recent substantial rental rate increases.
Assuming a 10-year-old vessel with 2015 newbuilding price of approximately $95 million, calculated over 20-year depreciation without considering residual value, current book value would be $47.5 million, but market value has reached $88 million, representing 85% appreciation. Although 2026 supply pressure increases somewhat, limiting freight rate heights, aging remains severe, with freight rate centers gradually moving upward.
Specialized shipping: New three major exports drive market demand, specialized cargo export prosperity continues. As of August 2025, China's clean energy technology exports reached record highs, totaling over $141 billion in value. Europe remains almost the largest import region for Chinese clean energy products. The Middle East, Latin America, and Africa are the regions with greatest future growth potential.
Due to the gigantism of new energy equipment, product transportation is gradually shifting from containerized transport toward specialized cargo transport, particularly for wind power equipment and energy storage cabinets. China's wind power and engineering machinery exports remain in a prosperous period. Currently布局的东南亚、东非、南非区域以及南美区域 are core areas for future Chinese industrial relocation, with equipment transportation demands from massive factory relocations continuously driving stable rental rate increases for company's main vessel types.