- OVERVIEW
The EV Transition: the Impact and Implications for the Freight Market
Electric cars accounted for roughly 25% of global new-car sales in 2025, and the International Energy Agency (IEA) expects sales to reach equivalent to approximately 28% of global car sales.
After years of broadly unsuccessful efforts to wean drivers off combustion engines, sales of electric vehicles are surging in Europe thanks to the jump in fuel prices stoked by geopolitical upheaval.
EV adoption is gaining momentum globally as governments implement policies aimed at reducing emissions. As of the latest data from the IEA and Bloomberg NEF, the global light vehicle population is projected to grow to 2 billion by 2050, with EVs accounting for more than 60% of the total fleet.
Pressure on Gasoline Demand and Product Tankers
Oil demand for petrochemical feedstocks, aviation, and heavy industries like shipping will remain more resilient. However, like gasoline, kerosene and gasoil, jet can be replaced.
Think batteries – who is to say we cannot have an electric aircraft?
The concept and capability is there; it is a matter if there is sound economics in scaling production
The aviation and marine sectors, which are harder to decarbonize, will continue to rely on oil-based fuels, albeit with increasing use of biofuels.
Demand for petrochemicals, driven by industrialization and consumer goods production, is expected to rise. Refineries that pivot towards producing plastics, chemicals, and fertilizers are likely to see continued demand for their output, even as transportation fuel demand wanes.
Australia, Brazil, South Korea, the United Arab Emirates, Canada, the United States, Nigeria and Japan have all sharply increased imports of Chinese EVs this year while simultaneously reducing gasoline imports.
For CPP shipping, this represents a structural headwind particularly for gasoline. However, lower domestic gasoline consumption does not automatically translate into equivalent lost tanker demand. Where refinery output remains strong, surplus products may instead be exported over longer distances, potentially supporting ton-mile demand.
Drewry Shipping Consultants mentioned:
“Like crude tankers, long-term prospects of demand for product tankers are not bright as a gradual decline in demand for gasoline and diesel will hurt the refined products trade. Nonetheless, LR tankers, which have been benefitting from the change in trade patterns due to the Russia-Ukraine war and Red Sea crisis, will continue to have a slight edge over MRs in the long term because of the expected increase in long-haul trade of naphtha and jet fuel. On the other hand, the expected decline in oil demand and refinery runs in the Atlantic market will hurt MR demand. However, continued growth in the intra-Asia and the US-Latin America products trade will support MR demand in the long run.”
From Oil Cargoes to Battery Supply Chains
EVs simultaneously create another freight ecosystem. EV battery deployment reached approximately 1.2 TWh in 2025, almost 30% higher year-on-year, and could approach 3 TWh by 2030. This supports demand for lithium, nickel, manganese, bauxite and other industrial materials. Indeed, China’s imports of several energy-transition metals increased strongly during 2026 even as crude and refined-product imports weakened.
Over the past few years, the average battery price has decreased across all regions, but regional price disparities have widened. In 2025, battery pack prices in China were 30% lower than in North America, and 35% lower than in Europe, compared to a respective 20% and 25% in 2022.
This means part of shipping’s exposure could gradually migrate from hydrocarbon transportation toward minerals, chemicals, batteries and finished vehicles.
What can Shipping Stakeholders do? Transition, Not Disappearance
There are three key areas to adapt to this changing environment:
- Diversification of Products/Desks: Pivoting toward future higher value products such as petrochemicals, specialty chemicals, and biofuels to mitigate the effects of declining transportation fuel demand.
- Investment in Knowledge and Infrastructure: Key areas such as green hydrogen, biofuels, renewable diesel, and carbon capture will help to capture market opportunities.
- Longer Tonne-Miles and Supply Mismatches: Declining fuel demand in one region does not necessarily mean declining freight demand. Refinery closures, changing production centres and regional supply deficits can force cargoes to travel further to reach the end consumer. Shipping stakeholders should therefore focus not only on absolute demand, but also on where products are produced, where shortages emerge, and how far the barrels must travel.
- PLATTS TREND
| WORLD SCALE | 29-Sep-26 | 30-Sep-26 | 1-Oct-26 | 7-DAYS AVERAGE | 1-DAY CHANGE | 7-DAYS CHANGE | 7-DAYS-CHANGE |
|---|---|---|---|---|---|---|---|
| SPORE/JPN (30 KT) | 498.5 | 510 | 550 | 481.31 | 40 | 117 | 27.02% |
| SPORE/OZ (35 KT) | 525 | 535 | 570 | 507.19 | 35 | 110 | 23.91% |
| KOREA /OZ (35 KT) | 555 | 572.5 | 575 | 514.69 | 2.5 | 115 | 25.00% |
| INDIA/JAPAN (35 KT) | 485 | 495 | 495 | 451.88 | 0 | 100 | 25.32% |
| $1 = $1K | 29-Sep-26 | 30-Sep-26 | 1-Oct-26 | 7-DAYS AVERAGE | 1-DAY CHANGE | 7-DAYS CHANGE | 7-DAYS-CHANGE |
|---|---|---|---|---|---|---|---|
| SPORE/HK | 1310 | 1335 | 1450 | 1,258.75 | 115 | 325 | 28.89% |
| KOREA/SPORE | 1950 | 2025 | 2025 | 1,857.50 | 0 | 325 | 19.12% |
| KOREA/JAPAN | 1330 | 1395 | 1395 | 1,295.63 | 0 | 195 | 16.25% |
| KOREA/H.K. | 1590 | 1670 | 1670 | 1,543.75 | 0 | 245 | 17.19% |
| KOREA/USWC | 4,025 | 4,125 | 4,150 | 3,715.63 | 25 | 825 | 24.81% |
| WORLD SCALE | 29-Sep-26 | 30-Sep-26 | 1-Oct-26 | 7-DAYS AVERAGE | 1-DAY CHANGE | 7-DAYS CHANGE | 7-DAYS-CHANGE |
|---|---|---|---|---|---|---|---|
| AG/JAPAN (55 KT) | 890 | 925 | 925 | 875.00 | 0 | 140 | 17.83% |
| AG/JAPAN (75 KT) | 875 | 925 | 925 | 871.88 | 0 | 140 | 17.83% |
| OMAN G. /JAPAN (55 KT) | 525 | 550 | 550 | 501.25 | 0 | 140 | 34.15% |
| OMAN G. /JAPAN (75 KT) | 500 | 550 | 550 | 483.13 | 0 | 165 | 42.86% |
- SMALL TANKERS MARKET UPDATE
The regional market continues to strengthen, although conditions remain firmer in the Far East than Southeast Asia. Intra-SEA activity has improved modestly as congestion, replacement requirements and stronger CPP demand absorb more tonnage, while Northbound remains relatively soft with owners offering competitive rates to reposition toward the Far East. In contrast, Intra-FEAST remains tight despite the holiday slowdown, with much of October space already committed and higher bunker costs supporting firmer freight. Southbound remains the strongest trade, with October space largely covered and workable positions increasingly moving into November. Overall, Southeast Asia freight remains broadly stable, while Far East rates maintain a firm upward bias amid tight tonnage and expectations of stronger winter demand. The regional market remains split, with Southeast Asia broadly steady to soft while the Far East stays firm.
- REPORTED FIXTURES
| VESSEL | SIZE | GRADE | L/C | LOAD | DISCHARGE | FREIGHT | CHTRS |
|---|---|---|---|---|---|---|---|
| VNR | 5 | PALMS | 12-16 OCT | DUMAI | KOREA | MID $50S | CNR |
| VNR | 10 | MTBE | 25-30 OCT | N. CHINA | SPORE | $550K L/S | CNR |
| VNR | 18 | CHEMS | 15-30 OCT | TAIWAN | WCI | $1.46M L/S | CNR |
| NAVIG8 CONSTELLATION | 35 | CPP | 15 OCT | SPORE | OZ | WS570 | AMPOL |
| LIA | 55 | CPP | 18 OCT | RED SEA | JAPAN | WS575 | ATC |
- GLOBAL BUNKER PRICE REPORT
(US$/MT)
| 29-Sept | 30-Sept | 1-Oct | 3-DAYS AVERAGE | 1-DAY CHANGE | 3-DAYS CHANGE | |
|---|---|---|---|---|---|---|
| VLSFO 0.5 | ||||||
| SINGAPORE | 865.5 | 854.0 | 876.5 | 865.3 | +22.5 | +11.0 |
| FUJAIRAH | 963.5 | 944.5 | 960.0 | 956.0 | +15.5 | -3.5 |
| ROTTERDAM | 686.5 | 681.0 | 700.0 | 689.2 | +19.0 | +13.5 |
| HOUSTON | 740.5 | 725.5 | 739.0 | 735.0 | +13.5 | -1.5 |
| GLOBAL MARKET | 876.0 | 860.5 | 873.0 | 869.8 | +12.5 | -3.0 |
| MGO | ||||||
| SINGAPORE | 1289.5 | 1278.5 | 1323.0 | 1297.0 | +44.5 | +33.5 |
| FUJAIRAH | 1666.5 | 1675.5 | 1694.0 | 1678.7 | +18.5 | +27.5 |
| ROTTERDAM | 1390.0 | 1400.0 | 1408.5 | 1399.5 | +8.5 | +18.5 |
| HOUSTON | 1388.0 | 1364.5 | 1384.0 | 1378.8 | +19.5 | -4.0 |
| GLOBAL MARKET | 1520.5 | 1522.0 | 1541.0 | 1527.8 | +19.0 | +20.5 |
| IFO 380 (HSFO) | ||||||
| SINGAPORE | 740.0 | 729.0 | 753.5 | 740.8 | +24.5 | +13.5 |
| FUJAIRAH | 685.0 | 656.0 | 666.5 | 669.2 | +10.5 | -18.5 |
| ROTTERDAM | 610.0 | 605.0 | 628.5 | 614.5 | +23.5 | +18.5 |
| HOUSTON | 553.5 | 538.5 | 540.0 | 544.0 | +1.5 | -13.5 |
| GLOBAL MARKET | 740.5 | 726.5 | 739.5 | 735.5 | +13.0 | -1.0 |
VLSFO
VLSFO prices showed mixed movements over the three-day period, with Singapore and Rotterdam increasing while Fujairah, Houston and the Global Market declined. The market was affected by mixed supply signals: China suspended October fuel exports, increasing concerns over regional refined-product availability, while Saudi export prospects were improving. Oil prices also jumped on 1 October as the market reacted to tighter fuel supply and increased U.S. military presence in the Middle East
MGO
MGO prices increased across all major bunkering hubs over the three-day period, making it the strongest-performing bunker grade in the data. The increase was supported by a worsening global diesel supply outlook, as China suspended fuel exports for October and Russia said it would not resume diesel exports to global markets while sanctions remain in place. These developments added further pressure to an already tight diesel market.
HSFO
HSFO prices showed mixed movements, with Singapore and Rotterdam increasing while Fujairah and Houston declined. The softer performance in Fujairah is consistent with recent reports that fuel-oil supplies at the port have recovered in recent months, increasing availability for Asian buyers. At the same time, the broader market continued to receive some support from renewed concerns over Middle East oil flows and higher crude prices.
- SHIPPING STOCKS MARKET WATCH
Scorpio to sell three product tankers for $180.5m and purchase four newbuild vessels for $207.8m. Torm is said to have shipped out an elderly tanker after a series of fleet renewal moves. Escalating geopolitical risk in the Middle East and surging freight rates across the crude tanker segments are boosting earnings.
- SOURCES
- Bloomberg (2026). EV Sales Are Booming in Europe with Gasoline at $10 a Gallon; accessed October 2026
- The International Energy Agency /IEA (2026). Global EV Outlook 202; accessed October 2026.
- The International Energy Agency /IEA (2026). Outlook for Electric Mobility; accessed October 2026.
- The International Energy Agency /IEA (2026). Electric Vehicla Battery Deployment Grew by Almost 30% in 2025; accessed October 2026.
- Reuters (2026). China’s Metal-heavy Commodity Imports Map a Messy Energy transition; accessed October 2026.
- Hydrocarbon Processing (2026). China’s EV Export Boom is starting to Show up in the Gasoline Market ; accessed October 2026.
- LinkedIn Kirk Williams (2024). The Impact of Electric Vehicles on the Oil Refining Industry: A Quantitative Overview; accessed October 2026.
- Precedence Research (2026). Petrochemical Market Size; accessed October 2026.
- Mordor Intelligence (2026). Jet Fuel Market Size and Share; accessed October 2026.
- Drewry Shipping Consultants (2024). Energy Transition and Long-term Outlook for Oil Tanker Supply/Demand; accessed October 2026.
- S&P Global Commodity Insights (Platts). Clean tanker freight assessments and tanker market intelligence, accessed October 2026.
- Saxo Investor, accessed October 2026.
- Firstlink Research Team. (2026). Internal Market Analysis . Firstlink Global Pte. Ltd., Singapore.
7 Comments
The EV transition is not wiping out freight demand, it is just changing the cargo mix. Gas and diesel volumes will drop, but things like jet fuel, petrochemicals, and biofuels will keep vessels busy. For shipping, it just proves we need to diversify and adapt to new markets as those cargo trends shift.
EV is good for a greener future, but the manufacturing carbon footprint are higher in terms of producing the batteries and the charging units. The world needs to find a solution to have a solid and safe system for the ecosystem.
The transition to EVs is more than just a shift in vehicle technology; it is also reshaping global energy consumption and trade flows. The key for the shipping industry will be to adapt and identify where the new sources of freight demand will emerge.
Gasoline out but bios coming in and able to be carried on tankers. Kero jet and gasoil demand will still have support. There will still be a demand for fossils but demand may have peaked and this transition to clean energy is a matter of when not if.
Electrification should have quite the impact on refined products trade and productions especially from downstream starting from diesels into gasoline. Key for sustainable earth, but could potentially could change the oil & gas trade flow moving forward. Something to ponder upon for diesel/gasoline focused companies before massive adaptation of electrics.
Interesting.. for sure the diesel cargo will drop in the future.. but tanker industries still can rely on marine and aviation industries, as mentioned in the article
As the world moves towards a greener future, the shipping industry must evolve alongside it, adapting to new challenges and opportunities.