That’s to say that geopolitical conflicts and doubts about the supply of new ships mean shipowners are bracing for a prolonged earnings boom.
The cost of hiring ships has been about a third higher than the average for the last ten years so far in 2024, according to Clarkson Research Services Ltd., a unit of the world’s largest shipbroker, propelled in part by ships sailing thousands of miles extra to avoid attacks in the Red Sea. Similiarly, Russia’s invasion of Ukraine has led to trade dislocations that are forcing oil tankers on far longer voyages than would otherwise be the case.
That’s in large part because shipowners aren’t sure what the fuel that will replace traditional oil propulsion will be, meaning that vessel orders haven’t accumulated in the same way as during shipping’s last great boom period in 2008.