- The prospect of peace in Ukraine may push Russian oil back to pre-war routes. That could shrink “tonne-miles” — a key driver of high tanker freight rates since the war.
- On the flip side: peace could also lead to a smaller global tanker fleet (as “shadow-oil” demand drops), which might boost rates for the best, modern tankers.
- The article concludes that older tankers (20+ years), now mostly used for sanctioned or discounted oil trades, may lose their cargo base. Many of them could be scrapped or sulk idle — a change that may reshape the tanker-freight market.
War Changed the Entire Oil-Shipping Map
As reported by Breakwave Advisors, the Ukraine war completely reshaped global oil-shipping flows. Russian oil was forced away from its traditional, shorter routes and had to travel much longer distances to reach new buyers. This pushed tonne-miles sharply higher. The report notes that crude and “dirty product” routes expanded by almost 6%, and clean-product routes grew even more, touching 9% during the peak period.
This increase in voyage distance acted like extra demand for tankers, which helped push freight rates up. Ships were busier, and more days were spent at sea instead of sitting idle.
After Peace, Routes May Shrink Again
If peace returns, Russian oil is expected to move back to its older, shorter trade lanes. That will naturally cut tonne-miles and reduce the demand pressure that kept tanker rates high.
Aframax tankers — those heavily used for Russian-to-India and Russian-to-China voyages — may feel this change the most. With shorter trips, ships return faster, increasing supply and softening freight prices.
A Different Possibility: Fewer Ships, Higher Rates
The report also presents a counter-argument. Even if tonne-miles drop, the tanker market might still support strong rates. Why? Because the global fleet may shrink.
During the war, older tankers — often over 20 years old — found new life by operating in sanctioned or discounted oil trades. If peace returns, most of those “shadow fleet” opportunities may disappear. Many of these vessels do not meet modern compliance and safety requirements and will not be accepted by mainstream oil companies.
This could result in a wave of scrapping. A smaller fleet means tighter supply, which can hold freight rates up even when routes get shorter.
The Future of Older Tankers Looks Uncertain
It highlights that nearly 90% of VLCCs aged 20+ years were trading Venezuelan or Iranian crude in early 2025. Similar patterns appeared for old Suezmax and Aframax/LR2 vessels. Once sanctions-driven trades fade, these ships may have nowhere meaningful to go.
Some may continue working in local or regional markets, especially East-of-Suez systems such as India, where discounted barrels still move. But most will no longer participate in long, inter-regional voyages. Shipowners will then face the costly choice of upgrading these vessels to Cap-1 standards or sending them to the scrapyards.
Who Gains in the End?
The outcome depends on which factor becomes stronger. If shorter routes dominate, rates may fall. But if scrapping accelerates and the fleet shrinks meaningfully, modern ships could benefit. They offer higher safety, higher compliance, and better acceptance by large oil companies — giving them pricing power.
In short, peace might reduce voyage lengths but also reduce the number of ships. The tanker market sits in a delicate balance between the two.
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Source: Breakwave Advisors
