As the situation in the Strait of Hormuz continues to disrupt the global energy transport chain, a new route restructuring is emerging in the global tanker market.
The Red Sea-Bab el-Mandeb Strait route, which was largely avoided by global shipowners due to Houthi attacks, is now attracting a significant return of tankers. The market logic is not that the risk in the Red Sea has been eliminated, but that the Strait of Hormuz is becoming a “new risk center” with a more immediate threat.
Data from Singapore-based shipbroker Sentosa Ship Brokers shows that the number of tankers transiting the Bab el-Mandeb Strait between March and April this year surged by 34% compared to the 2025 average.
This shift indicates that the “Cape of Good Hope diversion” model, which has dominated the global tanker market for the past two years, is beginning to loosen.
The Center of Risk is Shifting
Becky Smart, Research Analyst at Sentosa, pointed out that the risk ranking of key global maritime chokepoints by shipowners and charterers has changed significantly.
She stated that as transit through the Strait of Hormuz continues to face severe disruption, more and more vessels that previously avoided the Red Sea are returning to the Bab el-Mandeb Strait route.
Over the past two years, the Bab el-Mandeb Strait was one of the most sensitive risk areas for the global shipping industry. Following the outbreak of the Israel-Palestine conflict in October 2023, the Houthis launched sustained attacks on commercial vessels in the Red Sea and near the Bab el-Mandeb Strait, causing a large number of shipowners to abandon the Suez-Red Sea route and divert via the Cape of Good Hope.
This change profoundly altered the structure of the global tanker market. As voyage distances lengthened significantly, global ton-mile demand rose rapidly, effectively absorbing available market capacity and providing strong support for tanker freight rates.
But now, the “priority” of market risks has changed. Smart described it as: “When one door closes, another opens.”
Saudi Crude Oil Flow Changes
Against the backdrop of rising risks in the Strait of Hormuz, Saudi Arabia is accelerating the adjustment of its crude oil export routes. Sentosa data shows that Saudi Arabia is increasingly using the East-West Pipeline to transport crude oil for export from the Red Sea port of Yanbu.
Crude oil exports from Yanbu have surged from approximately 800,000 barrels per day before the conflict to nearly 3.5 million barrels per day, with the vast majority carried by VLCCs.
As these cargoes are primarily destined for Asian markets, the relevant VLCCs need to pass through the Red Sea and Bab el-Mandeb Strait twice: first sailing north in ballast to load in the Red Sea, then sailing south fully laden to Asia. At the same time, tanker voyages conducting east-west transport via the Suez Canal are also partially recovering.
Smart noted that currently, more vessels are transiting the Bab el-Mandeb Strait again, but they are not calling at Red Sea ports; instead, they are merely reusing the area as a “transit corridor” connecting Eastern and Western markets.
This effectively means that global tanker trade routes are reverting to the traditional pattern before the Houthi attacks erupted. However, she also emphasized: “It’s not because the Bab el-Mandeb Strait is risk-free, but because the Strait of Hormuz has become a more pressing problem.”
Asian Supply Tightness Accelerates “Return”
Another key factor driving this change is the tightening energy supply in the Asian market. Smart pointed out that the supply gap for crude oil and refined products in Asia is widening, and the market’s demand for rapid eastbound delivery of cargoes has significantly increased.
In this context, the significant time saved by transiting the Suez Canal and Bab el-Mandeb Strait, rather than diverting via the Cape of Good Hope, is becoming increasingly important.
She believes that for certain voyages, the additional security risk is now being viewed by the market as an “acceptable operating cost,” especially for vessels with no direct links to Israel, the United States, or the United Kingdom.
“The Red Sea hasn’t become safer; it’s just that the cost of avoiding the Red Sea has become higher.”
It is worth noting that although the Houthis have recently issued vague threats about resuming attacks in the Bab el-Mandeb Strait, no new sustained wave of attacks has been launched so far.
In contrast, the Persian Gulf is currently facing more direct and tangible shipping disruptions.
Freight Rate Logic Begins to Change
However, from a market supply-demand perspective, the recovery of the Red Sea route is not entirely bullish. Smart pointed out that if more tankers resume east-west transport via the Bab el-Mandeb Strait, it means shorter voyages, lower ton-mile demand, and the release of available global capacity.
This is fundamentally a bearish factor for freight rates. But she also emphasized that the market is far from returning to normal.
Disruptions in the Strait of Hormuz, declining Gulf exports, tight Asian supply, changes in Saudi crude oil flows, longer repositioning voyages, fluctuating insurance costs, and cautious sentiment among shipowners continue to distort the global tanker supply-demand structure.
Therefore, even if some vessels return to the Red Sea route, it is insufficient to completely reverse the current high-volatility state of the tanker market.
Meanwhile, BRS Shipbrokers also noted that recently, as more ballast tankers arrive in the Atlantic market, the previously surging tanker freight rates have begun to correct.
For instance, VLCC freight rates on the US Gulf-to-China route, which spiked to $29 million in early March, have now fallen back to $18 million, though they remain at relatively high levels.
The Suezmax and Aframax markets also saw significant increases earlier but began to correct after April, also due to an increase in ballast vessels arriving from the Asian direction.
Some of the new capacity even comes from LR2 tankers switching from clean petroleum product transport to “dirty” oil transport. Additionally, BRS noted that increased US enforcement of regulations on Venezuelan crude oil exports is also altering crude oil flows in the Atlantic Basin.
Against the backdrop of restricted Saudi crude oil exports, the US Gulf of Mexico is filling part of the supply gap with more Venezuelan crude. Data shows that Venezuelan crude oil exports have rapidly climbed from 50,000 barrels per day to 250,000 barrels per day recently.
