The Most Extreme Shipping Market in History, Explained | J Mintzmyer on Why Oil Tanker Rates Are Up 25x and Why It Can’t Last (and Why Dry Bulk, not Tankers, is the Next Shipping Boom)

Words like crisis or historic really do not even begin to capture what is going on with tankers and the Strait Of Hormuz. I mean, you will get into the numbers, but some of these tanker rates have gone up 25 times, not 25%, 25 times. So it's definitely the most extreme time to be a ship owner or ship investor right now. We're talking tankers transporting crude oil as well as refined products. Got someone very special to join us today. He has had a very good track record not just of of calling the cycle, but as well as as picking stocks, at model portfolio up roughly 40% since inception, a deca

Yeah. Absolutely, Jack. And first of all, thank you so much for having me on your podcast. You've been doing some great work across the sector, and I hear you've already talked to Ed Fin Richardson, and he's probably given your listeners some great gouge into the shipping sector as well. So thanks again for having me on. To hit the question head on about the tankers and how crazy things are, unprecedented is clearly the word there. We have spot rates recently, just in the last few days, and I don't know when you're going to publish this, Jack, but we're recording on the evening of 09/30/2026.

Wow. So on the VLCC rates in the spot market, they went from $40,000 a day to over $1,000,000 a day, 25 times increase, not 25%, 25 times. So if this move was, you know, 30% as extreme, it would still be off the charts. We'd still be talking about it. We'd still be calling it crazy, and it's three times that. Wow. Why are the rates so high? Know, the Strait Of Hormuz has officially been closed since the start of the war on February 28. I imagine that with the Strait Of Hormuz closed, there's a chance that that could be bad for rates because the ships couldn't get out. But I'm aware that there'

That's a that's a great question, Jack. And and I should caveat. You know, we say the 1,000,000 or 1,100,000 because that... That's a recent spot fixture or two or maybe three in the last few days. So it's not like the entire global fleet is getting fixed on those sorts of rates. But those are the eye popping ones. But even if you look over at Africa, West Africa to China, you're looking in the neighborhood of $500,000 a day. If you look at US Gulf to China, you're you're in the lower to mid six figures as well per day. So, it's a global market strength, Jack. And how did we get here? Well, fi

So there's two key concepts here. Number one is that inefficiency is good for tankers, and the reason is that it... Because it causes ships to go in inefficient routes, which causes the total amount of miles that they have to travel, ton miles, as we say, go up. And that is the second principle that ton miles is the real commodity that we're talking about here. It's not ships. It's not tankers. It's ton miles. And so, like, back in the old days, you know, Russia would export oil to Europe, and that's a very efficient route. So demand for ton miles was, you know, kind of normal. But then with t

Yeah, Jack. And just the caveat, I mean, one of the reasons I believe we're seeing extremely high rates now is because the strait's no longer closed. Right? You'd be... You're getting increased flows in there, so the ships are actually able to go in and load cargoes and get out. But there's a lot of owners out there who are avoiding the Strait Of Hormuz, either because of personal reasons or because of care for their seafarers or its political reasons. Right? They don't want to take that risk. They're a publicly traded company. So you also have a limitation in the willing providers of tanker t