Easing Red Sea Crisis Could Squeeze LR Rates Amid Ballooning Fleet – Drewry | 24/11/25

With a recent truce in the Red Sea and the potential resumption of traffic through the Suez Canal, demand for LR tanker tonne-miles may drop significantly. Shorter voyage durations — from about 82 days via the Cape of Good Hope to roughly 50 days via Suez — will increase effective tonnage supply. In combination with a growing global fleet, this is likely to put downward pressure on LR freight rates. Savings on regulatory costs (e.g., EU-ETS for emissions) further incentivize returning to traditional routes, reducing reliance on long-haul detours. Although the crude tanker market might offer some support, the outlook for product tankers remains one of tighter freight rates. Link to Article