Old Tankers Will Impact The World Economy

The Real Estate Espresso Podcast

Old Tankers Will Impact The World Economy

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Old Tankers Will Impact The World Economy

Welcome to The Real Estate Espresso podcast, your morning shot of what’s new in the world of real estate investing. I’m your host, Victor Menasce.

You’ve heard me say it numerous times: energy is the economy. If you don’t believe me, just look at Cuba. The country is being starved for oil, and the country is unable to function.

At first it was just the United States imposing sanctions on countries that it sees as violating international law. That includes Russia, Venezuela, Iran, North Korea, and probably a few others. But those sanctions have been largely paper exercises involving money and financial instruments. It’s only when a physical blockade of oil tankers severed energy trade routes that we started to see a real tangible impact. Other countries have joined in and impounded vessels that were also carrying sanctioned oil.

Now, when it comes to global oil prices, the usual metrics of supply and demand seem to rule the day. They measure surplus or shortage based on inventories consisting of tank storage and oil on the water, which is oil in the hold of the ship. But what about the dark fleet that doesn’t report its inventories?

As of early 2026 that dark, or shadow, fleet has become massive. It’s become a major fixture in global energy markets, largely due to the persistence of sanctions against Russia, Iran, and Venezuela. Estimating the exact share is tricky because these ships specialize in being invisible, but here’s a breakdown based on some of the latest maritime and financial data that we were able to find.

Seaborne trade on dark fleet tankers makes up somewhere in the range of about 15% of all global seaborne oil. When we look at total global oil production, including pipelines and domestic uses, the dark fleet handles roughly six to seven percent of the world’s total flow. Now, to put that in perspective, this shadow network moves over a hundred billion dollars’ worth of crude oil annually, bypassing traditional Western financial and insurance systems.

The growth of that fleet has been exponential since 2022. According to S&P Global, the shadow fleet now accounts for roughly eighteen and a half percent of all global tanker capacity. As of early 2026 that fleet is estimated at over 3,300 vessels. That’s a staggering increase from fewer than a hundred ships in early 2022.

Most of these ships are at least 15 years old. Most are well beyond 20 years old, well past the age when reputable firms typically scrap them. It’s owned by shell companies that are often based in unusual jurisdictions like Hong Kong or the Marshall Islands. They’re called dark because they turn off their AIS transponders, which allows for global position tracking. They participate in ship-to-ship transfers in international waters, and these ships frequently change country of registration, making it more difficult to track them. They lack the standard protection and indemnity insurance, creating a massive environmental risk for coastal nations.

In early 2026 nearly 21% of Russian seaborne oil passing through critical corridors like the Danish Straits was being carried by these false-flag or shadow tankers. Major buyers include China and India, although India has recently tightened its oversight and sanctioned vessels under Western pressure. And because these ships are aging and often skip mandatory safety inspections, a lot of maritime experts are warning that a major oil spill from a dark vessel is just a matter of time.

The oil market is often described as supply-and-demand, but in practice it’s a logistics story. If you cannot move a barrel of oil from where it’s produced to where it’s consumed, it might as well not exist. Tankers are that circulatory system in the world, and right now that system is running with very little slack.

But here’s the catch: this fleet is much older. Clarkson pegs the sanctioned tanker fleet at an average age above 20 years old, versus 13 years for the global fleet average. The mainstream fleet is aging too, with close to a thousand tankers already over 21 years old in a global fleet of about 7,800 tankers above 10,000 deadweight.

Now, insurance is the choke point. Much of the shadow fleet operates without the industry standard coverage, and that makes these ships hard to charter, hard to finance, and hard to accept in reputable ports. Brookings notes the growing demand for tankers not insured by the International Group of P&I Clubs. That’s exactly where the fragility shows up when claims happen.

Could we see a tanker shortage as these vessels age out and cannot rejoin the compliant fleet? Well, there’s no question. Recent estimates put the capacity utilization above 90% at the end of last year, and freight rates are running about 60% above the 10-year averages. There’s an order book of about 17% for new ships, and that will probably not offset the aging tonnage fast enough. So when the utilization is that high, removing even a few percent of effective capacity can cause rates to spike.

In terms of global impact, think of it in terms of delivered costs. If seaborne oil trade is on the order of 60 to 70 million barrels a day, implied by the fact that about 20 million barrels a day goes just through the Straits of Hormuz, and that represents nearly 30% of the world’s oil trade, then a one to two dollar per barrel increase in freight translates into roughly 25 to 50 billion a year of additional transportation costs, even before you price in volatility and rerouting.

So that’s how a shipping problem can, in fact, become an oil price problem, even if there’s plenty of crude oil in the ground.

So folks, an oil tanker crunch is coming. New ships are not being built fast enough, and these older ships are going to be very difficult to bring back into good standing with the world’s major insurance companies. We could see a global oil shortage because of a shortage of insurable ships.

As you think about that, have an awesome rest of your day. Go make some great things happen, and we’ll talk to you again tomorrow.

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