China's Increased Crude Purchases Signal Strong Q4 for Oil Tanker Market, Guojin Securities Says

A significant increase in crude oil procurement by Chinese refiners is expected to tighten the global oil tanker market, potentially paving the way for a fourth-quarter super-peak season, according to a recent research report from Guojin Securities. The analysis points to a combination of robust demand from Asia, shifting trade routes, and constrained vessel supply as key drivers for market strength.

China's Purchases Bolster Demand

The report highlights that Chinese refiners are actively securing crude supplies to replenish inventories drawn down by earlier disruptions in the Middle East. This purchasing momentum is now entering a delivery phase, providing a direct boost to tanker demand.

Citing an August 20 Bloomberg report, Guojin Securities noted several recent large-scale purchases:

• Rongsheng Petrochemical and state-owned refiners bought at least 8 million barrels of Iraqi crude for near-term delivery.
• A consortium including PetroChina, Sinochem, Unipec, and Rongsheng purchased a combined 10 million barrels of Saudi spot cargoes.
• Chinese refiners also secured at least 14 million barrels in additional Saudi contract allocations for September loading.

This trend is compounded by relatively low crude inventories in OECD countries, suggesting a broader potential for global restocking that would further support tanker utilization.

Geopolitical Tensions Reshape Trade Routes

Ad

Ongoing geopolitical instability, particularly disruptions to passage through the Strait of Hormuz and the Red Sea, has forced a restructuring of global oil trade. The report states that importers are increasingly turning to markets in the Atlantic basin, including the U.S. Gulf, South America, and West Africa.

These voyages are significantly longer than traditional routes from the Middle East. For example, a trip from the U.S. Gulf to Asia is 2.6 times longer than one from the Persian Gulf. This dynamic substantially increases ton-mile demand, a critical industry metric that measures the distance cargo is transported, even if total oil volume remains constant.

Supply Constraints Provide Support

The demand-side strength is being met with a constrained vessel supply, according to the analysis. The current orderbook-to-fleet ratio is at a multi-year high of 25.21%, but Guojin Securities notes that most new vessel deliveries are not expected until 2027-2029 due to limited shipyard capacity.

Meanwhile, the existing fleet is aging, with over 20% of Very Large Crude Carriers (VLCCs) now over 20 years old, which could increase scrapping pressure. This outlook is reflected in vessel values, where prices for 5- and 10-year-old VLCCs have exceeded newbuild prices—an inversion that signals strong market confidence in near-term earnings potential. The firm also noted that market concentration among top owners and the use of a less-efficient "shadow fleet" for sanctioned trades further tightens effective supply.