Donald Trump is back in the White House, and with him comes a familiar paradox: he wants U.S. oil production to soar while keeping fuel prices low for voters. That’s a tricky balancing act—one that has producers cheering and refiners sweating. His “drill, baby, drill” approach is pushing U.S. production to record highs, yet his gripes about OPEC’s pricing suggest he also wants cheaper oil. Markets, of course, are unmoved by political contradictions; they react to fundamentals.
OPEC, meanwhile, isn’t playing along. The cartel has kept production tight since 2022, resisting U.S. pressure to open the taps. The result? A delicate standoff where every barrel withheld or released carries economic and political weight.
This dynamic has direct consequences for the global shipping industry. A surge in U.S. production means more crude exports, particularly to Asia. The increase in long-haul shipments from the Gulf of Mexico to China, South Korea, and India keeps VLCCs (Very Large Crude Carriers) in demand. However, if OPEC counteracts U.S. barrels with aggressive production cuts, freight rates could swing wildly, leaving shipping companies struggling to forecast demand.
Trade wars: The tariff man strikes again
If there’s one thing Trump loves as much as oil, it’s tariffs. His latest moves include a 10% levy on Chinese goods, a 25% hit on Mexican and Canadian imports, and threats of more to come. The logic? To pressure trade partners into submission. The reality? Higher costs, slower growth, and potential retaliations that could upend global demand for oil.
China, the world’s second-largest economy and top oil importer, isn’t immune. With growth already slowing to 4.5% in 2025, additional tariffs could sap demand further. For shipping, this means potential disruptions in trade flows, altered shipping routes, and uncertainty over demand for crude tankers and product carriers alike.
A prolonged trade war could also impact refinery investments. Chinese refiners, which have been expanding their capacity to process more U.S. crude, may be forced to look elsewhere for supplies, reshuffling trade routes and affecting tanker utilization.
OPEC vs. IEA: Whose crystal ball is clearer?
Forecasting oil demand is a bit like predicting British weather—everyone has an opinion, and someone is always wrong. In 2024, OPEC and the International Energy Agency (IEA) couldn’t agree on how much demand would rise. OPEC saw growth at over 2.2 million barrels per day (mb/d), while the IEA pegged it at just 900,000. The reality? Somewhere in between.
For 2025, they’ve closed the gap—OPEC now expects 1.4 mb/d growth, while the IEA sees just over 1 mb/d. But here’s the twist: both agree that demand will be driven mainly by non-OECD nations, especially China, assuming it weathers the tariff storm. If Chinese demand stumbles, so too will oil markets—and shipping rates.
Meanwhile, the battle between OPEC and U.S. shale producers continues. OPEC’s unwillingness to flood the market keeps crude prices above $80 per barrel, which incentivizes American drillers to pump more. The impact on shipping? More U.S. crude heading overseas, supporting demand for tankers, particularly Suezmax and Aframax vessels.
Sanctions and supply: Tightening the screws on Russia and Iran
Trump has a message for Russia: stop the war in Ukraine, or face more economic pain. His tool of choice? Oil sanctions. Having already hinted at stricter measures, Washington is ramping up pressure to cut Russian revenues.
Iran, too, is back in the crosshairs. The U.S. Treasury aims to slash Iranian exports to under 100,000 barrels per day—down from today’s 1.5 million. If successful, this could send shockwaves through oil markets, tightening supply and pushing prices up. Good news for tanker owners moving sanctioned crude via discreet routes; bad news for consumers hoping for cheaper fuel.
Sanctions always create inefficiencies in global shipping. With Russian and Iranian crude facing restrictions, oil cargoes will take longer, less direct routes to reach buyers, benefiting the shadow fleet of older tankers operating in legal gray areas. This increased ton-mile demand could keep freight rates elevated, particularly for crude carriers that can navigate these complex waters.
How shipping wins—and loses
Volatility is a headache for most industries, but shipping thrives on it. Fluctuating oil prices create arbitrage opportunities, shifting trade routes and demand for tanker capacity. A high-price scenario, driven by Russian and Iranian supply cuts, could boost demand for long-haul crude shipments, keeping VLCCs busy.
Conversely, if Trump’s trade war depresses demand, the result could be fewer cargoes, lower freight rates, and a more challenging year for shipping firms. The container sector, in particular, could feel the pinch if global trade slows further.
And then there’s OPEC. If the cartel decides to flood the market with oil to counterbalance U.S. sanctions or trade-related slumps, it could drive down prices, increasing the volume of seaborne crude. That’s a lifeline for tanker operators, even as refiners and producers adjust to a changing landscape.
Another wildcard? Decarbonization pressures. The International Maritime Organization (IMO) is tightening emissions regulations, forcing shipowners to consider investing in cleaner fuels or energy-efficient retrofits. Higher compliance costs could eat into profit margins, particularly for older vessels that will struggle to meet new environmental standards.
Final word: Expect the unexpected
If there’s one certainty in oil markets, it’s that nothing stays still for long. Between Trump’s policies, OPEC’s strategy, and shifting trade dynamics, the only predictable outcome is unpredictability. For shipping, that means opportunity—if players can read the waves correctly.
One thing is clear: oil markets in 2025 are a high-stakes chessboard, with geopolitics dictating the moves. And in this game, those who understand the tides—not just of the oceans but of policy and economics—will be the ones who stay afloat.