Global Adaptation to the War: from an acute disruption phase into a more structural adaptation cycle.
Commentary
Global Adaptation to the War: from an acute disruption phase into a more structural adaptation cycle.
OVERVIEW
Global Adaptation to the Iran War
Macro & Geopolitics – From Shock to Structural Adjustment
The global energy and shipping markets are transitioning from an acute disruption phase into a more structural adaptation cycle following the Iran conflict. The effective disruption of flows through the Strait of Hormuz, has forced a rapid recalibration of trade flows, supply chains, and energy security strategies. Rather than a temporary dislocation, the market is increasingly moving toward a “living with disruption” framework, where supply diversification, rerouting of cargoes, and strategic stockpiling become embedded behaviours. As a result, the market is structurally supporting longer voyage distances, higher freight volatility, and persistent inefficiencies across the value chain. At the same time, Asia is increasing imports of discounted Russian crude, partially offsetting Middle East supply disruptions
Freight Market (Baltic and Platts) – Volatility Settles into Elevated Range
Freight markets, as reflected by Baltic & Platts indicators, suggest that the extreme volatility observed during the peak escalation phase is gradually normalising into a more stable but elevated range. Rates across LR and MR segments surged sharply during the initial disruption period, driven by panic-driven fixing, risk premiums, and tonnage dislocation.
PLATTS TREND
WORLD SCALE
14-Apr-26
15-Apr-26
16-Apr-26
7-DAYS AVERAGE
1-DAY CHANGE
7-DAYS CHANGE
7-DAYS-CHANGE
SPORE/JPN (30 KT)
302.5
325
347
291.56
22
89.5
34.76%
SPORE/OZ (35 KT)
360
370
390
347.81
20
70
21.88%
SK/OZ (35 KT)
335
360
390
337.50
30
70
21.88%
INDIA/JPN (35 KT)
305
295
300
303.75
5
-10
-3.23%
$1 = $1K
14-Apr-26
15-Apr-26
16-Apr-26
SPORE/HK
685
740
820
665.00
80
240
41.38%
SK/SPORE
820
830
900
806.25
70
125
16.13%
SK/JPN
575
585
650
569.38
65
100
18.18%
SK/H.K.
675
685
740
668.13
55
90
13.85%
SK/USWC
2085
2150
2275
2,077.50
125
270
13.47%
WORLD SCALE
14-Apr-26
15-Apr-26
16-Apr-26
AG/JPN (55 KT)
425
400
385
404.13
-15
-8
-2.04%
AG/JPN (75 KT)
405
380
370
384.63
-10
-2
-0.54%
Platts assessments show a broad-based strengthening across MR routes in the Pacific, with gains concentrated in intra-Asia and Australia-bound trades.
LR markets showed early signs of consolidation. AG–Japan LR1 (55kt) declined to WS385 (-2%), while LR2 (75kt) softened to WS370, confirming that the initial spike driven by Middle East disruption has begun to stabilise.
Trade Flow Shifts – The New Normal
The conflict has accelerated a significant reconfiguration of global product flows, with Asia emerging as the most impacted region due to its reliance on Middle Eastern supply.
In response to reduced availability of AG barrels, refiners across the Far East are increasingly drawing supply from alternative regions such as the United States Gulf, ARA, and West Africa. This has effectively replaced traditional short-haul Middle East trades with longer-haul trans-basin movements, fundamentally increasing tonne-mile demand.
At the same time, refiners are adjusting run rates and feedstock strategies to cope with uncertainty in supply chains. The Atlantic Basin has correspondingly benefited from stronger export demand, particularly in the MR segment, as arbitrage opportunities into Asia remain intermittently open. This structural shift implies that even if overall demand remains flat, freight markets will continue to find support through longer voyage distances and reduced logistical efficiency.
Floating Storage – Strategic Buffering Returns
Floating storage has re-emerged as a key adjustment mechanism in the current environment, reflecting the market’s need for flexibility amid ongoing uncertainty. Traders are increasingly utilising vessels as temporary storage units to manage price volatility, await clearer arbitrage signals, and mitigate logistical disruptions.
This behaviour is further compounded by refinery imbalances and port congestion, which delay cargo discharge and extend vessel turnaround times. As a result, a portion of the global fleet is effectively removed from active trading circulation, tightening prompt vessel availability.
MR MARKET OUTLOOK FOR THE NEXT 5-7 DAYS
The MR market East of Suez is expected to remain range-bound with a firm undertone over the next 5–7 days. However, cargo visibility remains inconsistent, and the return of some long-haul tonnage into the region is likely to cap further upside. Charterers are also showing increased resistance following the recent sharp rise in freight levels, particularly on shorter-haul routes.
Intra-Asia routes such as Korea–Singapore, Singapore–Japan, and Australia-bound voyages should continue to find support from tightening prompt tonnage and ongoing regional redistribution of CPP flows.
South Korea has secured substantial volumes of crude oil, along with additional naphtha supplies, from Kazakhstan, Oman, and Saudi Arabia, with shipments arranged via alternative routes that bypass the blockaded Strait of Hormuz. The main options are Red Sea route (via Saudi/Oman West Coast) and East-West pipeline (Saudi/Yanbu Red Sea).
Long-haul Pacific trades, including Korea–USWC, are expected to remain better supported due to sustained tonne-mile demand and limited alternative supply routes. Overall, the market is expected to stabilise at current levels, with downside limited by structural inefficiencies and reduced Middle East supply, while upside momentum moderates following the recent rally.
Meanwhile, the surge in US exports underscores the growing role of the US as a swing supplier into Asia,
AG–Japan LR is occurring against the backdrop of the renewed closure of the Strait of Hormuz following the US blockade. With fewer confirmed cargoes out of the Gulf and increased reliance on alternative routing and pipeline flows, LR1 and LR2 demand has become more irregular.
The regional market continues to soften this week, with weakening demand and rising tonnage supply shaping sentiment, although freight remains relatively firm for now. In Southeast Asia, Intra-SEA activity has declined further as CPP demand stabilises and chemical and palm movements remain subdued, leading to a buildup of prompt vessels, while easing bunker prices begin to introduce downward pressure—albeit delayed by owners resisting rate cuts. Northbound conditions remain weak with scarce base cargoes and increasing tonnage, pushing freight under growing pressure. In the Far East, Intra-FEAST has similarly softened amid plant turnarounds and reduced demand, though freight remains supported by owner resistance. Southbound activity has seen a slight pickup with methanol and MEG enquiries, keeping near-term space tight, but China’s upcoming sulphuric acid export ban is expected to weigh on future demand. Westbound flows remain steady with firmer rates in the low-to-mid $80s/mt range, supported by tighter northern tonnage and limited backhaul opportunities. Overall, the market reflects soft fundamentals with building supply, while freight remains sticky but increasingly under downward pressure.
With geopolitical tensions easing, bunker prices have begun to soften, which could gradually translate into downward pressure on freight levels. However, any adjustment is likely to be delayed, as some owners are still working off higher bunker costs incurred earlier, resulting in continued resistance to lowering rates in the near term.
On the westbound front, activity remains steady with most enquiries focused on May loadings, covering products such as toluene, methanol, and base oils. Freight has edged higher, supported by tighter northern tonnage and limited backhaul opportunities from India. Current indications for a full 12–13k dwt cargo are in the low-to-mid $80s/mt range, with owners maintaining firm ideas despite softer bunker prices.
REPORTED FIXTURES
VESSEL
SIZE
GRADE
L/C
LOAD
DISCHARGE
FREIGHT
CHTRS
VNR
6
CHEMS
01 – 15 May
MID CHINA
STRAITS
LOW 60S PMT
CNR
VNR
12
MEAC
25 – 30 MAY
TIANJIN
STRAITS
$500K L/S
CNR
VNR
41
BIOS
25 Apr – 5 May
STRAITS
ROTTERDAM
$3.5 L/S BSS 3/1
CNR
ATLANTIC EAGLE
35
CPP
27-Apr
KOREA
OZ
WS400
ATC
TORM NEW ZEALAND
35
CPP
27-Apr
KOREA
SPORE
800K
ATC
NAVE ATROPOS
55
NAP
28-Apr
DUQM
JAPAN
WS315
OQ
GH UMEKO
75
ULSD
29-Apr
SIKKA
OZ
WS275
BP
BUNKER PRICE UPDATES
While there has been a modest easing in bunker levels, there is a gradual shift toward alternative fuel blends, including biofuel and methanol-based solutions.
News & Commentaries
Global Adaptation to the War: from an acute disruption phase into a more structural adaptation cycle.
Global Adaptation to the Iran War
Macro & Geopolitics – From Shock to Structural Adjustment
The global energy and shipping markets are transitioning from an acute disruption phase into a more structural adaptation cycle following the Iran conflict. The effective disruption of flows through the Strait of Hormuz, has forced a rapid recalibration of trade flows, supply chains, and energy security strategies. Rather than a temporary dislocation, the market is increasingly moving toward a “living with disruption” framework, where supply diversification, rerouting of cargoes, and strategic stockpiling become embedded behaviours. As a result, the market is structurally supporting longer voyage distances, higher freight volatility, and persistent inefficiencies across the value chain. At the same time, Asia is increasing imports of discounted Russian crude, partially offsetting Middle East supply disruptions
Freight Market (Baltic and Platts) – Volatility Settles into Elevated Range
Freight markets, as reflected by Baltic & Platts indicators, suggest that the extreme volatility observed during the peak escalation phase is gradually normalising into a more stable but elevated range. Rates across LR and MR segments surged sharply during the initial disruption period, driven by panic-driven fixing, risk premiums, and tonnage dislocation.
Platts assessments show a broad-based strengthening across MR routes in the Pacific, with gains concentrated in intra-Asia and Australia-bound trades.
LR markets showed early signs of consolidation. AG–Japan LR1 (55kt) declined to WS385 (-2%), while LR2 (75kt) softened to WS370, confirming that the initial spike driven by Middle East disruption has begun to stabilise.
Trade Flow Shifts – The New Normal
The conflict has accelerated a significant reconfiguration of global product flows, with Asia emerging as the most impacted region due to its reliance on Middle Eastern supply.
In response to reduced availability of AG barrels, refiners across the Far East are increasingly drawing supply from alternative regions such as the United States Gulf, ARA, and West Africa. This has effectively replaced traditional short-haul Middle East trades with longer-haul trans-basin movements, fundamentally increasing tonne-mile demand.
At the same time, refiners are adjusting run rates and feedstock strategies to cope with uncertainty in supply chains. The Atlantic Basin has correspondingly benefited from stronger export demand, particularly in the MR segment, as arbitrage opportunities into Asia remain intermittently open. This structural shift implies that even if overall demand remains flat, freight markets will continue to find support through longer voyage distances and reduced logistical efficiency.
Floating Storage – Strategic Buffering Returns
Floating storage has re-emerged as a key adjustment mechanism in the current environment, reflecting the market’s need for flexibility amid ongoing uncertainty. Traders are increasingly utilising vessels as temporary storage units to manage price volatility, await clearer arbitrage signals, and mitigate logistical disruptions.
This behaviour is further compounded by refinery imbalances and port congestion, which delay cargo discharge and extend vessel turnaround times. As a result, a portion of the global fleet is effectively removed from active trading circulation, tightening prompt vessel availability.
The MR market East of Suez is expected to remain range-bound with a firm undertone over the next 5–7 days. However, cargo visibility remains inconsistent, and the return of some long-haul tonnage into the region is likely to cap further upside. Charterers are also showing increased resistance following the recent sharp rise in freight levels, particularly on shorter-haul routes.
Intra-Asia routes such as Korea–Singapore, Singapore–Japan, and Australia-bound voyages should continue to find support from tightening prompt tonnage and ongoing regional redistribution of CPP flows.
South Korea has secured substantial volumes of crude oil, along with additional naphtha supplies, from Kazakhstan, Oman, and Saudi Arabia, with shipments arranged via alternative routes that bypass the blockaded Strait of Hormuz. The main options are Red Sea route (via Saudi/Oman West Coast) and East-West pipeline (Saudi/Yanbu Red Sea).
Long-haul Pacific trades, including Korea–USWC, are expected to remain better supported due to sustained tonne-mile demand and limited alternative supply routes. Overall, the market is expected to stabilise at current levels, with downside limited by structural inefficiencies and reduced Middle East supply, while upside momentum moderates following the recent rally.
Meanwhile, the surge in US exports underscores the growing role of the US as a swing supplier into Asia,
AG–Japan LR is occurring against the backdrop of the renewed closure of the Strait of Hormuz following the US blockade. With fewer confirmed cargoes out of the Gulf and increased reliance on alternative routing and pipeline flows, LR1 and LR2 demand has become more irregular.
Source: Yalibnan.com
The regional market continues to soften this week, with weakening demand and rising tonnage supply shaping sentiment, although freight remains relatively firm for now. In Southeast Asia, Intra-SEA activity has declined further as CPP demand stabilises and chemical and palm movements remain subdued, leading to a buildup of prompt vessels, while easing bunker prices begin to introduce downward pressure—albeit delayed by owners resisting rate cuts. Northbound conditions remain weak with scarce base cargoes and increasing tonnage, pushing freight under growing pressure. In the Far East, Intra-FEAST has similarly softened amid plant turnarounds and reduced demand, though freight remains supported by owner resistance. Southbound activity has seen a slight pickup with methanol and MEG enquiries, keeping near-term space tight, but China’s upcoming sulphuric acid export ban is expected to weigh on future demand. Westbound flows remain steady with firmer rates in the low-to-mid $80s/mt range, supported by tighter northern tonnage and limited backhaul opportunities. Overall, the market reflects soft fundamentals with building supply, while freight remains sticky but increasingly under downward pressure.
With geopolitical tensions easing, bunker prices have begun to soften, which could gradually translate into downward pressure on freight levels. However, any adjustment is likely to be delayed, as some owners are still working off higher bunker costs incurred earlier, resulting in continued resistance to lowering rates in the near term.
On the westbound front, activity remains steady with most enquiries focused on May loadings, covering products such as toluene, methanol, and base oils. Freight has edged higher, supported by tighter northern tonnage and limited backhaul opportunities from India. Current indications for a full 12–13k dwt cargo are in the low-to-mid $80s/mt range, with owners maintaining firm ideas despite softer bunker prices.
While there has been a modest easing in bunker levels, there is a gradual shift toward alternative fuel blends, including biofuel and methanol-based solutions.