Hormuz Is Reopening — Why I'm Not Selling My Tanker Positions

The Headline vs. the Mechanics

On June 17, 2026, the US and Iran signed a Memorandum of Understanding declaring the Strait of Hormuz toll-free for commercial shipping for 60 days (CNBC, June 17). FACT

The tanker stock selloff that followed treated this as a binary event: Hormuz open = shipping thesis over. That is a misread. Let me walk through the mechanics.

The backlog problem: As of June 18, approximately 118 tankers were still sitting in the Persian Gulf waiting to transit. Even with a signed MOU, the physical clearance of that queue takes a minimum of 10 to 15 days (CNBC, June 18). FACT Kpler estimates only ~40 daily transits within 30 days of reopening — less than half the pre-conflict ~80 transits per day — and that is assuming no setbacks. FACT

The mine problem: Political agreements do not clear mines. Full demining of the strait takes up to 6 months by independent maritime estimates (Business Standard, June 19). FACT Until that process is complete, transit risk does not disappear — it just shifts from diplomatic to physical.

THESIS A 60-day memo buys time. It does not restore the pre-March 2026 risk environment. Insurance markets understand this.

War-Risk Insurance: The Market That Knows

Here is a number that the equity market appears to be ignoring: war-risk insurance premiums surged from 0.25% of vessel value pre-conflict to 3-8% during the closure period — that translates to up to $8 million per VLCC per transit (Business Standard, June 19, 2026). FACT

Insurance markets reprice based on actual physical risk, not political announcements. The fact that premiums are still at multiples of pre-conflict levels tells you something: underwriters are not treating a 60-day diplomatic memo as mission accomplished.

INTERPRETATION High insurance costs are not simply passed through and forgotten. They feed into effective voyage economics — compressing net margins on Hormuz routes, extending the economic advantage of Cape of Good Hope alternatives, and keeping ton-mile demand elevated longer than the headline suggests.

Supply Math: The Floor That Doesn't Move

The most important part of the tanker thesis has never been Hormuz. It is the supply side — and that is structural, not geopolitical.

Fleet Age: 28% of VLCCs Are Over 20 Years Old

More than 28% of the global VLCC fleet — over 170 vessels — exceeds the 20-year age threshold used by major oil companies in their vetting processes (Hellenic Shipping News / Tankers International). FACT These vessels face a simple reality: they cannot easily trade with the largest charterers, their maintenance costs spike, and they approach economic obsolescence.

THESIS An aging fleet facing retirement pressure is a structural capacity drain. New orders take years to deliver and current orderbooks remain thin relative to scrapping requirements.

Net VLCC Supply Growth: ~1%/Year for the Next 3 Years

Effective VLCC net supply growth — deliveries minus retirements — is approximately 1% per year for 2026 through 2028 (Tankers International / gCaptain). FACT

At 1% per year, global oil demand does not need to grow much at all for the supply/demand balance in tankers to remain tight. A diplomatic agreement that lasts 60 days does not conjure 50 new VLCCs. The yard capacity and lead times simply do not permit it.

For Historical Context: VLCC ATH Was $423,736/Day

The Baltic TD3C benchmark hit an all-time high of $423,736 per day on March 3, 2026 (gosships.com / maritime-hub.com). FACT That number illustrates how violently supply-demand imbalances can reprice freight. It also illustrates what the floor looks like: even if rates normalise significantly from ATH, the structural argument for a sustained elevated rate environment versus pre-2022 norms remains intact.

Portfolio Context: What I Actually Hold

My largest public position is CMB.Tech (CMBT) at approximately 3.7% of the public portfolio (Trade Republic + Scalable). FACT — own disclosure

TORM (TRMD) is a product tanker anchor in the portfolio. TORM declared a Q1 2026 dividend of $0.70 per share, paid June 11, 2026 (TORM 6-K SEC filing). FACT

Dorian LPG (LPG) rounds out the tanker core.

THESIS The combination of CMB.Tech's diversified fleet exposure and TORM's product tanker positioning gives the portfolio coverage across the tanker sub-segments. Neither a 60-day Hormuz MOU nor the resulting rate normalisation changes the underlying structural case I bought into.

I am not averaging up here — I am simply not selling positions I bought on the structural thesis just because a geopolitical headline generated a knee-jerk market reaction. The math on both the supply side and the insurance market still supports holding.

The Thesis in One Sentence

THESIS A 60-day diplomatic memo does not reprice a structural supply deficit that took years to build — and the insurance markets, mine clearance timelines, and ~1% VLCC net supply growth are all telling you the same thing.

The structural tanker thesis is not dead. It is being tested by a news cycle. Those are different things.

If you want to research the fundamentals of the specific companies in more depth before making any decision, tools like InvestingPro give you direct access to balance sheets, fair value models, and dividend safety scores. That is what I use for my own fundamental data layer — not because it produces the answer, but because it surfaces the right questions quickly.

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