Roar Adland, SSY’s head of research, gives his 2026 shipping market outlook.
After six long years of continuous disruption, starting with covid in January 2020, shipping analysts can be forgiven for longing back to the good ol’ days when only supply and demand fundamentals and perhaps a sprinkling of market sentiment actually mattered.
The past year has laid bare that shipping is now, explicitly, a bargaining chip in a geopolitical game of tit-for-tat. Not only in terms of tariffs and counter-tariffs, as we saw in the previous US-China trade war, but also regarding ‘special port fees’ and attempts at forcing the fleet of your counterpart to operate elsewhere. While there is now a one-year truce in the trade conflict, tariffs on US commodities into China remain elevated and, thus, still reduce trade volumes between the two countries. However, for commodities where there are alternative sources of supply and demand, such as grains, coal and to an extent crude oil, such artificial trade barriers have merely redirected flows (e.g. South American soybeans replacing US origin) with limited impact on global shipping demand.
What about the potential for a normalisation of Red Sea/Suez transits? The challenge – in commodity shipping at least – is that there aren’t many incentives to change the status quo. The economic inconvenience of the alternative Cape of Good Hope routing is not large enough for shippers to push strongly for a change, and owners and operators, as well as their insurers, certainly prefer the safer and longer option. Moreover, the Houthi campaign should be interpreted in a bigger geopolitical context where providing selective access to your allies’ fleets is both cheap to achieve and easy to maintain. Also, such power over one of the world’s major maritime chokepoints is nearly impossible to wrestle away without incurring excessive military or political costs. Hence, while there will be occasional positivity and talk of resumption also in 2026, we lean to the side of no change.
The end of Russian hostilities in Ukraine seemingly falls in a similar category at this moment, with neither party (and their allies) able or willing to give in to the demands of the other. Even if there is a ceasefire under fair terms that all parties agree to, the road towards a complete rolling back of sanctions on Russia, certainly in Europe which is what matters for trade efficiency and shipping markets, would be long and politically fraught. What we can hope for is a much-needed amnesty on the scrapping of dark fleet tankers which would simultaneously reduce environmental risk and improve the market balance.
Despite the recent geopolitical shocks to the world economy, commodity demand has arguably held up very well. Going into 2026 we remain positive to commodity demand, with Europe and the US potentially seeing an improvement in economic growth and industrial production as interest rates come down. While the Chinese property sector is unlikely to recover any time soon, the resulting headwinds on overall economic growth are now by definition much weaker while advanced manufacturing and exports are firing on all cylinders.
The only concern which is self-inflicted is the observation that supply growth is picking up strongly across all shipping sectors. Some shipping sectors – notably chemical tankers, product tankers and LNG – are increasingly structurally vulnerable on the basis of a simple fundamental balance. Until now, shipping has been saved by continued disruption but at some point we will have hit peak chaos.
Finally, as always, sentiment will eat careful fundamental research for breakfast any day.
