Tanker Boom: High Rates, Geopolitical Risk, and the New Oil Map

NEW YORK, NY – December 12, 2025 – In the high-stakes world of global oil transport, fortunes are made and lost on the daily charter rate of a single vessel. For Nordic American Tankers (NAT), the tide has turned dramatically in its favor. The NYSE-listed owner of Suezmax crude carriers recently unveiled a series of spot market fixtures that paint a vivid picture of a market on fire, with daily earnings skyrocketing far beyond operational costs.

In a communication to investors, NAT's Founder and CEO, Herbjorn Hansson, detailed several lucrative, short-term contracts with major oil companies. One vessel was fixed for over 40 days at a Time Charter Equivalent (TCE) rate of approximately $52,000 per day. Another secured an eye-watering $78,000 per day for a 33-day voyage, while a 50-day journey commanded roughly $95,000 per day. When set against the company's estimated daily operating cost of just $9,000 per ship, the profit margins are staggering. Hansson attributed the windfall to a simple, powerful market force: "a scarcity of vessels."

These figures are not just numbers on a page; they represent a gusher of cash flow for a company navigating one of the world's most cyclical industries. While NAT posted a modest net loss of $2.8 million in the third quarter of 2025 on an average TCE of $27,490 per day, these new fixtures signal a powerful upswing. If such rates hold, the company's fourth-quarter results could be transformative, underscoring the immense upside potential in the spot-focused tanker business. Yet, beneath the surface of this boom, deeper currents of geopolitical tension and long-term strategic repositioning are beginning to stir.

The Anatomy of a Boom

The current strength in the Suezmax market is no accident. It's the result of a confluence of factors creating a perfect storm for tanker owners. On the demand side, both the International Energy Agency (IEA) and OPEC project continued growth in global oil consumption through 2026, fueled by an improving macroeconomic outlook and robust demand from developing economies in Asia and Latin America.

More critically, the supply side of shipping has been constrained. Global oil supply has recently contracted, partly due to production cuts and outages within OPEC+ but also due to the growing impact of Western sanctions on major producers like Russia and Venezuela. These geopolitical disruptions don't just remove oil from the market; they reroute it. Sanctioned barrels often travel longer, more inefficient routes on a so-called "shadow fleet," while compliant vessels like NAT's are in high demand for mainstream routes, tightening available capacity.

Industry data confirms the trend. Average Suezmax TCE rates surged past $70,000 per day in October 2025, the highest level in nearly two years. While the global Suezmax fleet is projected to grow by 4% in 2025—largely in line with demand—a projected 5% fleet expansion in 2026 could introduce headwinds. For now, however, the scarcity NAT's leadership highlighted is very real, allowing companies with available tonnage to capture exceptional profits.

Navigating Volatility and Competition

While the current market is a cause for celebration, it also illuminates the strategic challenges facing established players like Nordic American Tankers. The company’s strategy of keeping its fleet primarily in the spot market exposes it directly to this upside, but also to the market’s notorious volatility. The contrast between its Q3 average earnings and the latest fixtures is a testament to how quickly fortunes can change.

Furthermore, the competitive landscape is fierce. Industry analysis suggests that some competitors operating newer, more efficient Suezmax vessels secured average charter rates 25% to 45% higher than NAT's during the same period in Q3. This performance gap highlights the constant pressure to modernize. In an apparent move to address this, NAT has a preliminary agreement to construct two new Suezmax tankers, with orders slated for early 2026. This investment in fleet renewal is crucial for maintaining a competitive edge in securing premium contracts and meeting increasingly stringent environmental regulations.

Despite the competitive pressures and a slight net loss last quarter, NAT has demonstrated a resilient commitment to its shareholders, declaring its 113th consecutive quarterly dividend. This balancing act—returning capital to investors while managing debt and planning for future fleet needs—is central to navigating the industry's boom-and-bust cycles. The ability to secure high-paying fixtures now is essential for building the financial war chest needed to weather future downturns and fund long-term growth.

The Venezuelan Shadow

Perhaps the most forward-looking element of NAT's recent communication was its brief but significant mention of Venezuela. Hansson noted the country holds an estimated 17% of the world's oil reserves and acknowledged that NAT's ships "have not been in Venezuela for several years." This deliberate distancing is telling, as it comes at a moment of heightened geopolitical focus on the South American nation.

Venezuela is a sleeping giant in the energy world. Its current production of around 900,000 barrels per day is a fraction of its potential, crippled by years of underinvestment and severe international sanctions. Just this week, the U.S. Treasury Department intensified its pressure campaign, sanctioning multiple shipping companies and vessels for transporting Venezuelan oil. For a NYSE-listed company like NAT, avoiding the region is not just a choice but a necessity to ensure compliance and mitigate risk.

However, the sheer scale of Venezuela's reserves means it cannot be ignored in any long-term strategic calculus. A future change in its political landscape or a relaxation of sanctions could radically redraw the world's energy map. The re-entry of 1 to 2 million barrels per day of Venezuelan crude into the global market would reshape shipping routes, potentially shortening voyages to key markets like the U.S. Gulf Coast and altering demand patterns for Suezmax tankers. For now, Venezuela's predicament contributes to market inefficiency and higher rates for compliant operators. In the future, it represents both a monumental opportunity and a disruptive threat to the current equilibrium, a strategic wildcard that every tanker executive is watching with keen interest.