Aletho News

Sunk Ships Don’t Sail Home: Why Peace Won’t Save the Oil Market and War Will Wreck It

By Larry C. Johnson | SONAR21 | November 3, 2026 

Yesterday, at the opening of ADIPEC in Abu Dhabi, ADNOC’s CEO Sultan Al Jaber told the world that energy security now comes down to getting the oil to the customer, not just producing it. He wants storage, redundancy and diversified routes to market. He noted that shipping and logistics have climbed from less than 5 percent of the cost of a barrel to more than 30 percent. All true. But he skipped one small detail about routes to market. They require ships.

Karl Miller, who has been annoyingly right about the Gulf all year, supplied that detail in a November 1 assessment of the Persian Gulf tanker fleet. If Al Jaber’s speech was the diagnosis, Miller’s report is the X-ray. It shows why a barrel now costs a third of its value just to move.

The butcher’s bill, maritime edition

Miller counts 79 named tankers in the Gulf damage and casualty record. Thirty-five of them are VLCCs, the 2-million-barrel workhorses of the crude trade. That works out to 70 million barrels of carrying space caught up in the damage, for each loading. Together the 79 ships represent more than 14 million tonnes of rated deadweight. His assessment rates the physical damage and replacement burden as “catastrophic,” which is the sort of word that is hard to soften in a press release.

The worst cases make the point:

• Sunk: the Suezmax KYLO on September 5 and the Aframax RIESCO on September 8, about 267,000 tonnes of deadweight lying on the bottom.
• Permanently disabled: DOWNY and STARK I, one VLCC and one Suezmax, reported by the military on September 5.
• Destroyed or rendered inoperable: DERYA, KAVIZ and CHARMINAR, reported by the military on September 8.
• ADNOC’s own ships: the VLCCs AL BAHYAH and MOMBASA B took significant damage in July. MOMBASA B later went back to shuttle work.
• Jet fuel adrift: METRO VENETIAN suffered an engine-room casualty on August 24 with 704,000 barrels of jet fuel aboard. It later limped into Fujairah.
• Confiscated: KAVOMALEAS caught fire in July, was abandoned and ended up in Iranian custody. It was last seen near Qeshm on October 29.

Then there are the October cases: EVER VICT losing command, PETRO DOLPHIN evacuated and drifting, and GEM NO 2 leaking oil into the Gulf. Nothing says “diversified routes to market” quite like a tanker drifting with nobody aboard.

Arithmetic, the enemy of optimism

A tanker is not a barrel. It is a delivery service that loads, sails, discharges, sails home and does it again. Lose the ship and you lose every cargo it would have carried for the rest of its working life.

Miller cites an October 30 assessment that 18 non-Iranian VLCCs are likely out of operation. That is 36 million barrels of loading space. How much daily delivery that represents depends on how long the full round trip takes:

Full voyage cycle Lost gross service

30 days – 1,200,000 barrels/day

45 days – 800,000 barrels/day

60 days – 600,000 barrels/day

That is for the VLCCs alone. It leaves out the Iranian fleet, the two sunk medium tankers and the product carriers.

Now for diesel and jet fuel, the products that actually keep trucks and airliners moving. Before the war, about 750,000 barrels a day of diesel and gasoil and 400,000 barrels a day of jet and kerosene came through Hormuz. In one of Miller’s sensitivity cases, 10 percent of the ships are lost and the round trip stretches from 30 days to 40. Only 67.5 percent of the old service survives. That is 373,750 barrels a day of diesel and jet fuel that never arrives. Al Jaber said yesterday that diesel stocks in some markets are at their lowest seasonal level in 35 years. Now you know part of the reason.

The ships that survive have problems too. A hull that sits idle in warm Gulf water for six months grows things. On a 45-day cycle, fouling that cuts speed by 10 percent reduces daily service by about 9 percent, and a 20 percent speed cut costs about 18 percent. The barnacles, at least, have had a very good war.

Supertankers are not sold at the mall

Somewhere in Washington, someone is surely saying that the market will simply build more ships. It will. Eventually. A VLCC is an industrial project: hull, propulsion, cargo systems, commissioning, sea trials and classification approval, all before it carries a single barrel. The owners’ contracts show how long that takes:

• Worldwide, 20 VLCCs are scheduled for delivery in Q4 2026 and Q1 2027 combined.
• Scorpio’s newly ordered VLCCs arrive in September and October 2028.
• Bahri’s three newly contracted VLCCs arrive in 2029–2030.
• Product tanker orders from Scorpio and TORM deliver in 2029, with options running into 2030.
• Another 138 VLCCs on the orderbook are scheduled for 2029 and later.

Those 20 near-term ships are not an emergency reserve waiting in a parking lot for the Gulf’s insurance claims. They already have owners and charters. Chartering an existing tanker only moves the problem to someone else’s trade. And a ship that has been hauling crude cannot load jet fuel next week. Its tanks need cleaning, inspection, technical approval, crew, insurance and a route that nobody is shooting at. If you lost a ship in September 2026, expect its replacement sometime during the next presidential term.

I am not going to claim the Gulf has stopped exporting. It hasn’t. Late in October, non-Iranian Middle East crude exports exceeded their historical average of about 16 million barrels a day. The bottleneck was how fast ships could be loaded. Some damaged ships do come back. A traceable subset of attacked tankers averaged about two months to their next cargo. On October 28, Bahri reported two affected ships back in commercial service and two still under repair.

Miller is also careful about his counting. The 79 ships include vessels that have since been repaired. The roughly 20-ship current outage estimate (18 VLCCs plus the two sinkings) is a separate measure, and you cannot add it to the 79. Ships running with their transponders off do not mean a hidden graveyard either. There is no honest multiplier for unreported losses, and Miller declines to invent one. Iran’s roughly 43 million barrels of crude and condensate sitting loaded but trapped inside the blockade area on October 22 is cargo waiting to leave. It is not 43 million barrels lost.

That restraint is what makes the conclusion hard to dismiss. Exports are flowing because the surviving fleet is being worked hard, and because buffers are being drawn down. Al Jaber put that drawdown at nearly a billion barrels worldwide.

Peace will not refill the tanks

Suppose the war ends tomorrow. Trump lifts the blockade, hands back Iran’s frozen assets and declares victory on Truth Social. The ships sunk in September stay sunk. The VLCCs out of service still need repair yards or newbuilds that will not arrive before 2028. And the owners and insurers who have spent eight months watching tankers burn will not rush back into the strait because of a press conference.

Aramco’s CEO, Amin Nasser, has already said as much. Speaking in London on October 5, he put lost supply since the war began at almost 3 billion barrels, with about 1 billion barrels pulled from stocks to cover the gap. Even after Hormuz fully reopens, he warned, “replenishing inventories while meeting demand could take up to two years.” Refilling those stocks would add roughly 2 million barrels a day of demand for 18 months. That demand lands on top of normal consumption and has to be carried by a fleet that is short of ships. Nasser also noted that most of the oil still in storage is not really available, because it is sitting in pipelines or needed as minimum tank volume.

So two years is the optimistic case. It assumes the peace holds, the strait stays open and the shipping capacity Miller documents comes back faster than the shipyard calendars allow. I would not bet the farm on any of those.

Or Trump could make it catastrophic

And if Trump decides instead to launch a new attack on Iran? Miller’s 79-ship damage record shows how easily tankers in the Gulf and the Gulf of Oman can be hit. Today’s exports depend on the ships that survived, run flat out, and on inventories that have been drained. A new round of strikes would put those survivors back in the line of fire just as the cushion runs out. Last time, the world had a billion barrels in storage to burn through. Next time it will not. That is how a serious energy crisis becomes a catastrophic one.

Count the cargoes, not the communiqués

So here we are. The Gulf’s producers can pump. Their CEOs can give speeches about resilience. Their communications chiefs can send emails demanding corrections without naming a single error. None of that floats a hull. A fleet that lost two ships to the seabed, had five more reported disabled or destroyed and has about 18 VLCCs sitting out of operation is not rebuilt by press release. It is rebuilt in shipyards in Korea, China and Japan, on a schedule that runs to 2030.

Miller ends his report with a test I would recommend to every energy minister now taking a victory lap. Measure recovery by ships cleared to load, carrying space restored and complete cargo cycles delivered. Everything else is just talk about routes to market.

The only thing moving smoothly through the Gulf right now is the rhetoric.

November 3, 2026 - Posted by aletho | Economics, Wars for Israel | Iran, Middle East