Geopolitical risks combined with a surge in supply have caused global crude oil freight rates to soar to a three-year high

Geopolitical risks are escalating and regional crude oil supply is surging, driving tanker freight rates to nearly three-year highs. Meanwhile, the International Energy Agency (IEA), the U.S. Energy Information Administration (EIA), and the Organization of the Petroleum Exporting Countries (OPEC) have shown significant divergence in their assessments of the oil supply-demand outlook for 2026. According to Bloomberg, the Baltic dirty oil freight index rose by over 30% in the second half of 2025 and has climbed about one-third again since the beginning of 2026. The recent rise in freight rates is primarily driven by the Trump administration's takeover of Venezuelan oil sales, with major traders like Vitol Group and Trafigura actively reallocating vessels to transport Venezuelan crude to refineries along the U.S. Gulf Coast and in Europe. According to CCTV News, on January 14 local time, a U.S. government official revealed that the first batch of Venezuelan oil sales has been completed. This transaction is valued at $500 million, and the official added that more oil sales are expected in the coming days and weeks. The three major institutions have significant differences in their market outlook for 2026: the IEA predicts a supply surplus of over 3.7 million barrels per day, the EIA estimates about 2 million barrels per day, while OPEC believes the market is close to balance, with a surplus of only about 600,000 barrels per day. The core of the divergence lies in differing expectations for demand growth, which further complicates the already multifaceted challenges in predicting oil prices. The structural rise in freight rates is reshaping the logistics costs of oil trade, while the divergence in forecasts among authoritative institutions highlights the high complexity and analytical challenges currently facing the crude oil market. Venezuelan Factor Triggers Freight Rate Surge The Trump administration's takeover of Venezuelan oil sales has become a direct catalyst for the recent surge in tanker freight rates. According to Bloomberg, shipbrokers have pointed out that the newly added demand for transporting Venezuelan crude has exacerbated an already tight capacity market, while adverse weather conditions in some regions have also supported freight rates. This change has not only increased transportation costs on key routes around the Americas but has also attracted more tanker resources from other global regions, including the Middle East, where Saudi Arabia and Iraq have recently ramped up exports, further intensifying capacity diversion. At the same time, ongoing international sanctions against major oil-producing countries like Russia and Iran have led to a significant amount of crude oil being forced into floating storage at sea. The accumulation of crude oil on tankers is continuously expanding, delaying the turnaround speed of vessels re-entering the spot market, further compressing effective capacity supply. Diminishing Hopes for Red Sea Route Restoration The market had previously hoped for the restoration of the Red Sea route to alleviate freight rate pressures; if this route could be reopened, it would significantly shorten the travel time between Europe and Asia. However, given the ongoing turmoil in Iran and the regional tensions triggered by U.S. threats of intervention, optimistic expectations for vessels to return to this route in the short term are rapidly fading. According to CCTV News, recently, Iran has erupted in protests due to rising prices and currency devaluation, with unrest occurring in multiple locations Causing casualties. The Iranian Supreme National Security Council issued a statement on the 9th, saying that under the planning and control of the United States and Israel, the protests have evolved into a threat to national security. According to Bloomberg analysis, the current high freight rates are likely to persist. Faced with the weak trend of international oil prices, the financial space available for oil producers to pay transportation costs is very limited. Significant Discrepancies in Predictions from Three Major Institutions The three major authoritative energy institutions—the International Energy Agency (IEA), the U.S. Energy Information Administration (EIA), and the Organization of the Petroleum Exporting Countries (OPEC)—have significant discrepancies in their forecasts for the oil market in 2026, with predictions ranging from "severe oversupply" to "near balance." According to Bloomberg, the IEA expects that the supply surplus in the first half of 2026 will exceed 4 million barrels per day, with an average annual surplus also higher than 3.7 million barrels per day. The EIA's forecast is relatively moderate, estimating that this year's supply will exceed demand by more than 2.8 million barrels per day, with a peak surplus this quarter possibly reaching over 3.5 million barrels per day. In stark contrast, calculations based on OPEC data show that the market is trending towards balance, with an expected average supply surplus of only about 600,000 barrels per day in 2026. Core of Discrepancies in Demand Growth Expectations The differences in forecasts largely stem from the varying judgments of each institution regarding oil demand and growth prospects. According to Bloomberg, the IEA's forecast for daily demand in 2026 is slightly below 105 million barrels, about 1.5 million barrels lower than OPEC's estimate. Since August of last year, this gap has narrowed: the IEA has raised its forecast by a total of 540,000 barrels over the past five months, while OPEC's outlook has remained unchanged. The IEA's relatively optimistic expectations are based on its outlook for economic normalization, believing that consumption in 2025 was affected by actual and potential tariff turmoil. The agency currently expects daily consumption to grow by 930,000 barrels in 2026, but this is still only about two-thirds of the increase predicted by OPEC analysts. The EIA's growth expectation falls between the two. The discrepancies are not only reflected in the judgment of the intensity of growth for the year but also reflect long-accumulated historical differences. OPEC analysts believe that since 2023, the annual growth rate of oil demand has been 1.3%, which is basically consistent with the long-term trend before the COVID-19 pandemic. The EIA's expected annual growth rate is slightly lower at 1.2%. This has led to the gap in demand judgments between the EIA and OPEC widening from about 1.2 million barrels in 2023 to 1.7 million barrels in 2026. The divergence between OPEC and the IEA is even more pronounced: the two institutions' estimates for 2023 demand differ by only 200,000 barrels, while the forecast gap for 2026 has expanded to over 1.5 million barrels. The IEA believes that the average annual consumption growth rate from 2023 to 2026 will be only 0.9%, significantly lower than the historical average level