Jefferies has increased its 2027 LR2 earnings forecast to $34,000 a day from $30,000, arguing that geopolitical disruption and persistent trading inefficiencies will underpin tanker returns, Splash247 reported. The investment bank remains positive on tanker shares and expects rates to decline more gradually than the market currently anticipates, rather than remain at their exceptionally high spot levels.
The outlook forms part of research examining a change in the relationship between shipping equities and geopolitical risk. According to Splash247’s account of the findings, shipping shares generally moved against geopolitical risk during the first decade of this century but have tracked Jefferies’ risk index each year since 2021. The bank expects owners to continue benefiting from disrupted trading patterns into 2027 and 2028, or beyond.
Longer voyages and a less interchangeable fleet are central to that argument. During an August earnings call, Navios Maritime Partners chief Angeliki Frangou explained that diversions linked to the Red Sea and Hormuz crises kept vessels at sea for longer, effectively reducing available capacity. Speaking at Splash Singapore, Norden chief executive Jan Rindbo said sanctions, regional conflicts and environmental rules were dividing the global fleet into smaller groups, requiring more ships to move unchanged cargo volumes.
Alongside its LR2 upgrade, Jefferies raised its 2027 VLCC earnings estimate from $60,000 to $65,000 a day. Splash247 reported that the bank sees ageing vessels and eventual oil inventory replenishment as additional support for earnings after the immediate crisis eases. Its estimate that 51% of crude tankers are at least 15 years old could help offset an orderbook representing roughly 27% of the existing crude tanker fleet.
The bullish assessment is not universal. Rindbo has cautioned that tankers could be approaching a market peak, with Norden cutting tanker exposure and shifting capital towards dry bulk. Splash247 also cited Clarksons Research showing the current VLCC upswing at around 17 times its long-term average. Previous booms across other shipping sectors subsequently lost most of their exceptional earnings premiums, often within months. The timing of any tanker reversal remains uncertain while geopolitical distortions continue to constrain fleet efficiency.