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)

J Mintzmyer · Value Investor's EdgeBearish

BWET, built on short-dated tanker freight futures, could fall 50-75% once rates peak.

BWET is the top-performing ETF of 2026 and is almost entirely based on the next two to three months of tanker spot rates via forward freight agreements. Its gains came from heavy backwardation, where forward rates sat far below spot. If rates have peaked and are falling fast, the ETF will be hit hard. Mintzmyer calls the current rates unsustainable and says the fund is not an indictment of its managers.

“if you believe that the rates have peaked and coming down fast, then something like BWET is going to get absolutely smashed, like down 50%, down 75%, maybe even worse.”at 30:00

J Mintzmyer · Value Investor's EdgeNeutral

DHT Holdings trades at strong valuations but is fine at $120K-130K day rates; hold.

DHT is one of the largest tanker firms and trades at strong valuations. It does not need $170,000 a day for three years to make good money. Average rates of $120,000 to $130,000 a day for two or three years would let it do just fine, so Mintzmyer's view is a hold rather than a buy given the rich share prices.

“They're trading at strong valuations, Jack, but they don't need 170,000 a day for three years to make good money.”at 32:21

J Mintzmyer · Value Investor's EdgeNeutral

Frontline trades at strong valuations but is fine at $120K-130K day rates; hold.

Frontline is one of the biggest tanker firms and trades at strong valuations. It does not need $170,000 a day for three years to earn good money. Average rates of $120,000 to $130,000 a day over two or three years would let it do just fine, so Mintzmyer's view is a hold.

“They're trading at strong valuations, Jack, but they don't need 170,000 a day for three years to make good money.”at 32:21

J Mintzmyer · Value Investor's EdgeNeutral

Okeanis Eco Tankers trades at strong valuations but is fine at $120K-130K day rates; hold.

Okeanis is one of the large tanker owners. Its shares trade at strong valuations, but it does not need $170,000 a day for three years to earn good money. Average rates of $120,000 to $130,000 a day over two or three years, including spot earnings, would let it do well from here. Mintzmyer rates it a hold, the same call as his other large tanker names.

“They're trading at strong valuations, Jack, but they don't need 170,000 a day for three years to make good money.”at 32:21

J Mintzmyer · Value Investor's EdgeBullish

CMB Tech is a top pick for 2026 and is selling tankers well in the open market.

Mintzmyer calls CMB Tech his firm's top pick for 2026. He says it is more of a dry bulk company but is harvesting and selling its tankers. Rumours say it sold three middle-aged tankers for around $250 million, which he has not yet confirmed. He would rather be the seller in that deal than the buyer.

“that happens to have been our top pick for '26. They're much more of a dry bulk company, but they are harvesting and selling their tankers.”at 33:33

J Mintzmyer · Value Investor's EdgeBearish

Nordic American Tankers is massively overextended and a clear avoid.

Mintzmyer says the stock is massively overextended relative to its peers. Its fleet is all Suezmaxes, most of them older vessels, which he calls inferior. He also judges the management team less savvy and sharp than others in the sector, so the stock is a clear avoid.

“One that I'll throw out here that's, in our opinion, a clear avoid is Nordic American tankers, NAT, and that in our opinion, that was massively overextended from its peers.”at 34:45

J Mintzmyer · Value Investor's Edge

Tanker fundamentals were strong before the war: record-low orderbook, oldest fleet, rising ton-mile demand.

Before the conflict, the tanker market already had generationally low forward supply and the oldest fleet in modern history. Demand was rising because trade routes were getting longer. US exports now go largely to Asia, more than double the distance of Middle East Gulf routes. Shipping measures demand in ton-miles, and those were rising. Rates were already strong entering 2026 before any missiles flew.

“We had generationally low forward supply. The fleet was the oldest it had been in modern history, and we had promising demand trend shifts.”at 5:18

J Mintzmyer · Value Investor's Edge

Product tanker rates are a far-below-parity catch-up trade and are now surging.

Mintzmyer expected the gap between crude and product tanker rates to close, but product rates first pulled back and stabilised faster because product tankers were more evenly spread across routes. China's cut in product exports reduced demand. In the last week, product tanker rates began to rise sharply. He sees them as a catch-up trade, still far below where they should be relative to crude.

“finally, the thesis is working and product tanker rates are hockey sticking right now. ... I think a catch up trade for product tanker rates, I think, far below where they should be in in parity.”at 24:24

J Mintzmyer · Value Investor's Edge

Crude tanker rates are unsustainable and likely to collapse within days or weeks.

Spot VLCC rates of about $1M to $1.2M a day are far above normal levels of around $20K to $40K a day. Rates at these levels are not sustainable under basic supply and demand logic. Ships are only earning them because they are trapped or repositioning into windows when the Strait looks open, and owners avoiding Hormuz limit willing tonnage. If the Strait reopens fully, a 95% fall is possible. Mintzmyer expects the rate spike to last days or weeks, not months.

“The rates at these levels are not sustainable by any form of just common sense supply demand and commodity markets. We might see a few weeks. There could be a few days. I do not think we will see months.”at 30:52

J Mintzmyer · Value Investor's Edge

Tanker asset values are at records and rich, but justified if rates hold near $150,000 a day.

Tanker asset values are at all-time highs, above the 2007-2008 peaks. Mintzmyer's model says a ten-year-old VLCC costing $150-200M needs about $150,000 a day for two to three years to justify the investment. One-year charters near $170,000 a day would not do it on their own. Prices are very rich but not insane if rates hold for multiple years.

“And so assets are very, very rich, Jack, but I don't think they're insane.”at 31:56

J Mintzmyer · Value Investor's Edge

Diesel, not crude, is the flashing red risk in global oil markets.

Mintzmyer says the real global crunch point is diesel more than crude. China's teapot refiners had quotas slashed after the conflict began. China drew on reserves for domestic use, then restarted imports and refinery runs to export refined products as margins became extreme. Diesel is at the centre of current product tanker and refining dynamics.

“the real crunch point globally is less so crude oil... it's way more so diesel. Diesel is really the flashing red risk factor here.”at 21:53

J Mintzmyer · Value Investor's Edge

A multi-month US diesel export ban would be very bearish for product tanker rates.

A ban would cut off a large US Gulf cargo flow to Europe and Asia, the kind of long-haul route that drives product tanker demand. Mintzmyer expects a short-lived panic and rerouting that could lift rates for a week or two. A longer ban of several months would be very bearish for product tanker rates, similar to the impact of China halting its product exports. He says experts in the administration should debate it.

“But if it was a longer lasting ban of, like, several months, ... I'm of the debate that would be very bearish for product tanker rates.”at 27:44

J Mintzmyer · Value Investor's Edge

Strait of Hormuz flows are back to about 70-80% of pre-conflict levels; Iran's blockade is ineffective.

Mintzmyer estimates flows are back to roughly 70-80% of pre-conflict levels, around 12-14 million barrels a day against about 20 before. The recovery depends on US Navy cover that gave owners confidence. Iranian exports are largely choked off, and Iran's control of the Strait has been largely ineffective, with few ships sunk. He warns that AIS tracking data is unreliable in the Strait, with delays of two to three weeks and ships that seem to teleport, so official transit counts need scepticism.

“from everything we've seen, it looks like we're back to 70 to 80 of of pre conflict flows out of the Strait Of Hormuz.”at 15:14