Geopolitical reshaping of the oil transportation landscape: restricted capacity accounts for 19%, China Merchants Energy Shipping benefits from "compliance premium" with a significant increase in net profit

On March 26, China Merchants Energy Shipping (601872.SH) announced that in 2025, operating revenue was RMB 28.177 billion, up 9.22% year over year. Net profit was RMB 6.012 billion, up 17.71% year over year. It plans to distribute a cash dividend of RMB 2.5 per 10 shares (tax included), for a total cash dividend of RMB 2.019 billion (tax included).

In 2025, crude oil seaborne trade volume rose slightly by 0.6% to 1.96 billion tons. Against the backdrop of increased production under OPEC+, crude oil exports in compliant markets recovered clearly. However, growth in crude oil demand was not strong. With the outlook for global economic growth unclear and factors such as trade protectionism, geopolitical tensions, high inflation, and debt issues potentially weighing on economic growth, crude oil demand may be suppressed as a result.

In 2025, the growth rate of the crude oil tanker fleet was limited, rising only 0.7% to 460 million deadweight tons. Among them, the VLCC tanker fleet capacity still remained at a relatively low level, increasing by only 0.2%. In 2026, benefiting from the continued release of newbuild orders, the crude oil tanker fleet size is expected to grow by 3.1%, and VLCC capacity is expected to increase by 3.2%. Although newbuild orders in the second half of 2025 continued the strong momentum seen in 2024, the current share of outstanding orders held by the global market relative to existing capacity is still at a historical low. More new deliveries are reflected as replacement demand for aging tonnage of 15 years and above. Currently, the crude oil tanker fleet is aging significantly, with the share of capacity with a vessel age of more than 15 years reaching 44%, which implies substantial room for scrapping. This will continue to constrain the growth of effective fleet capacity. Overall, the growth of crude oil tanker fleet capacity in 2025 was limited. At the same time, restrictions in Europe and the U.S. on “shadow” fleets and non-compliant trade have been continuously tightened (measured by deadweight tons; the share of capacity of restricted crude oil tanker fleets relative to total fleet capacity has risen to 19%). This has continued to provide support to the compliant tanker market, which is more positive for the VLCC tanker market.