Annual Shipping Market Analysis Report 2025
Department of Port Management and Shipping National and Kapodistrian University of Athens
Head of Research Group “Shipping Analytics”: Dr. Michael Tsatsaronis*
Researchers: Anastasia Vitzilaiou – Theocharis Karasavvidis – Amalia Mania
This annual report for 2025 is an extensive synthesis of the developments in the global shipping markets, as recorded by the research team of Dr. Michalis Tsatsaronis, Assist. Professor of the Department of Port Management and Shipping of the University of Athens throughout the year. 2025 will go down in history as a year of profound structural change, where geopolitical instability acted as a catalyst for the realignment of trade routes, while the tightening of the environmental framework transformed decarbonization from a theoretical obligation into a critical factor of economic viability. Through the first three quarters of the year, we observed a marked divergence between different sectors, with tankers demonstrating remarkable resilience and the container sector grappling with excess capacity, while the fourth quarter came to seal these trends, while highlighting the importance of strategic carbon emission management.
Bulk Carriers
The dry bulk carrier market in the year 2025 was a field of intense testing and strategic reversal, as traditional commodity demand cycles faced an unprecedented regulatory environment and geopolitical turbulence that affected sea routes. The course of the sector was not linear, but was characterized by periods of intense uncertainty, especially in the first half of the year, and a trend of stabilization towards the end, which, however, was accompanied by increased operating costs due to the green transition.
At the beginning of the year, during the first quarter of 2025, the Bulk Carriers market faced a significant downturn, which was reflected in the 11% decrease in freight rates in the spot market as early as January. The main cause of this decline was identified in the grain sector, where Russia imposed export restrictions and quotas, directly affecting activity in the Black Sea. This development created a domino effect in the smaller ship classes, such as Supramax and Handysize, which are heavily reliant on the grain trade. At the same time, the Chinese New Year period brought the expected temporary downturn in demand for iron ore, which pushed the BCI (Baltic Capesize Index) to lower levels than expected.
Moving into the second quarter, the market began to emit mixed signals, with a hesitant recovery looming on the Pacific routes. During May 2025, there was a notable increase in demand on the US side, which provided a breather for Panamax and Kamsarmax-style vessels. However, the overall picture remained subdued, as the global economic slowdown affected coal consumption in Europe, despite the need for replenishment.
At this point, shipowners began to realize that keeping freight rates at sustainable levels would not only depend on demand, but also on managing available capacity. Fleet ageing began to be a central topic of discussion, as a large proportion of ships built in the previous decade began to lag behind in terms of energy efficiency, making them less attractive for long-term charters.
The third quarter of 2025 brought a relative stabilization around the mid-market levels. Fares for Capesize vessels experienced volatility but managed to hold on above operating expenses, supported by the steady flow of iron ore from Brazil to China. It is impressive that during Q3, orders for new dry cargo ships saw a historic drop of 80% compared to the previous year. This was mainly due to the fact that shipyards, having filled their order books with containers and tankers, offered delivery dates after 2028, while shipbuilding prices remained at prohibitive levels. This lack of new supply acted as long-term support for the market, as the ratio of the order book to the existing fleet fell to levels that historically portend a recovery in freight rates.
Table 1: Dry Cargo Market Indicators Analysis, Source: Authors Edit
The fourth quarter of 2025, which concludes the annual picture, was marked by the full integration of environmental concerns into operational decisions. Seasonal demand for coal and grain in the final months of the year provided a final boost to freight rates, however shipowners’ net profit was squeezed by the need to purchase emission allowances under the EU ETS. In Q4, Bulk Carriers began to more aggressively implement the strategy of “slow steaming” to limit CO2 emissions and improve their CII score for the following year. Geopolitical instability, particularly ongoing restrictions on the Panama Canal due to water scarcity and rerouting in the Red Sea, forced many grain carriers from the U.S. to Asia to choose longer routes, increasing tonne-miles and absorbing the capacity freed up by new deliveries.
In the S&P sector, 2025 was the year of middle-aged second-hand ships. As new shipbuilding was very expensive, demand turned to ships aged 11-15, which accounted for almost half of the transactions. Shipowners preferred to invest in assets with lower capital costs, which could be depreciated faster in a market with an uncertain future.
At the same time, scrapping activity remained at historically low levels, as the lack of new ships forced the market to keep even the oldest and less efficient hulls in operation. This has created an “ageing” in the Bulk Carriers fleet, which is expected to be the main challenge for 2026, when FuelEU Maritime regulations will impose severe fines on carbon-intensive ships.
The technological upgrade of the industry in 2025 has not stopped despite the difficulties. The adoption of autonomous navigation systems, as we have seen with the moves of Eastern Pacific Shipping, and the installation of advanced digital emissions monitoring systems, have now become essential tools for EU ETS compliance. The use of digital platforms to optimize speed according to weather and currents has enabled many fleet managers to reduce fuel consumption by up to 8%, offering a crucial advantage in the charter market. 2025 has closed for Bulk Carriers with a sense of anticipation as the industry gears up for 2026, where managing “carbon credits” will be the new form of challenge.
The fleet management strategy for Bulk Carriers in the period 2025-2026 is now focused on “environmental shielding”. Shipowners are being asked to decide whether to retrofits with wind assist systems or to switch to biofuels to fill compliance gaps. The analysis of the fourth quarter shows that the companies that invested in data tracking technologies in a timely manner are the ones that manage to minimize the cost of pollutants, turning a regulatory obligation into a competitive advantage in the time charter market.
Tankers
The tanker sector in the year 2025 emerged as the undisputed “pillar of stability” of global shipping, demonstrating a remarkable resilience in the face of macroeconomic challenges. The market was fueled by a combination of limited capacity supply and geopolitical shifts that sharply increased transportation distances, creating a high-freight environment that lasted throughout the year. The strategic importance of tankers was further bolstered by the need for energy security in Europe and continued demand from Asia, making the industry the most profitable for 2025.
In the first quarter of 2025, the tanker market entered with strong momentum, which was supported by ongoing sanctions on Russian oil and insecurity in the Red Sea. These factors forced crude and derivatives carriers to opt for longer routes, increasing tonne-miles and effectively absorbing available capacity. The shift towards sustainability caused a particular sensation, as already in Q1 it was recorded that orders for ships with the possibility of using alternative fuels, such as methanol, exceeded 200 units in total in the market, with tankers holding a significant share in this trend.
In the spring of 2025, the global tanker market experienced intense volatility, influenced by geopolitical developments, regulatory interventions, and a redistribution of global trade flows. At the beginning of the year, VLCC and MR Pacific freight rates fell, while U.S. sanctions on a large number of ships significantly boosted demand for Russian oil shipments to Asia, highlighting market imbalances. At the same time, the possible resumption of routes through the Red Sea created cautious optimism, although concerns about the safety of maritime routes remained a limiting factor. The reallocation of crude flows to Asia, coupled with a low orderbook and increased U.S. exports, supported demand for VLCCs, despite the global economic slowdown and OPEC+ production cuts. However, proposals such as imposing port dues on Chinese-made tankers and boosting refining capacity in Nigeria influenced the expectation of upward pressure on freight rates, while Europe’s shift to alternative suppliers boosted demand for midsize vessels, mainly MRs, in the Mediterranean.
Table 2: Tanker Market Analysis, Source: Authors Edit
As long-distance transport continues to support demand, the overall market is showing signs of weakening due to trade tensions, a slowdown in the global economy and an acceleration in the energy transition, particularly in China. Despite limited signs of stabilisation in May, the market remains vulnerable, with increased volatility, in particular due to possible developments in US-Iran relations, which may temporarily increase the volume of oil transported and the variability of fares. Notable Q2 events include companies’ strategic moves to adopt innovative fuels, such as the certification of ships for the use of FAME B100 biofuels by Whitaker Tankers.
But the real surge came in the third quarter of 2025, which was marked by a strong recovery, especially in the VLCC (Very Large Crude Carriers) category. Profits of large tankers increased sharply, driven by the strengthening of exports from the Atlantic (USA, Brazil, Guyana) to the Far East. This shift in trade flows created a huge demand for tonne-miles, which combined with the historically low level of new deliveries, drove freight rates to record levels for the period. The product tanker market also remained in excellent shape, benefiting from the restructuring of global refineries, which forces the transport of finished products over much longer distances than in the past.
The fourth quarter of 2025 sealed the dominance of tankers, as winter demand in the northern hemisphere acted additively to the already congested sea routes. The full implementation of the EU ETS, which in Q4 required companies to have already planned to cover 70% of their emissions, was the central operational issue. Tanker owners, taking advantage of their high profitability, invested heavily in emission allowances (EUAs), while at the same time imposing “green surcharges” to pass on part of the cost to charterers. Geopolitical instability showed no signs of de-escalation, maintaining the ‘risk premium’ in freight rates and boosting demand for ships with high safety and compliance standards, further isolating the ‘shadow fleet’.
An important long-term issue remains the aging of the global fleet, with over 17% of ships being over 21 years old, a figure that is expected to nearly double by 2029. This situation increases maintenance costs and makes it difficult to comply with stricter emissions regulations, reinforcing the need for investment in new, environmentally efficient tankers, where Greek companies are leading the way. Delays in shipyards and limited growth in new orders since 2022 are limiting capacity supply and intensifying the risk of fleet bottlenecks. In the medium term, the International Energy Agency’s (IEA) estimates of a peak in global oil demand by 2029, mainly due to Asia, provide moderate support to the freight market, despite the volatile geopolitical and economic environment.
In the new construction sector, 2025 was a year of strategic selectivity. Although prices at shipyards remained at historically high levels, tanker owners proceeded with orders for dual-fuel (methanol and LNG) vessels, recognising that compliance with FuelEU Maritime from 2025 onwards requires ships with a low carbon footprint. Significant was the move to build LCO2 (liquefied carbon dioxide) transport ships, such as Capital Gas’ partnership with Hyundai, which opens up a new market for the tanker industry in the context of the carbon economy.
Second-hand ship sales moved to more balanced levels, reflecting a subdued investment climate, while scrapping activity remained subdued, as high yields and longer transport distances encouraged the maintenance of older ships in service. Overall, despite trade and geopolitical tensions, both shipbuilding and tanker trading remained at high levels, with imminent deliveries of new ships being a key factor likely to affect freight markets in the near future.
In April 2025, the market moved in a climate of heightened caution, influenced by geopolitical tensions, regulatory uncertainty, and delays in shipyards. New orders remained limited as shipowners postponed investments pending clearer decarbonisation frameworks. In Aframax and LR2, activity remained relatively stable, with an emphasis on long-term charters and increased selectivity in terms of the technical specifications of the vessels.
Scraps remained close to zero, as even ships over 20 years old continued to generate significant revenue, despite increased maintenance requirements and higher costs under the EU ETS. This lack of fleet renewal is, however, a “bombshell” for 2026, as older units will find it difficult to cope with the stricter CII indicators and financial penalties of the new regulations. Despite the implementation of the Hong Kong Convention (HKC) in June 2025, shipowners preferred to delay scrapping, assessing that market conditions and future developments in steel prices and the regulatory framework do not justify immediate recycling decisions.
India stands out as the premier hub for compliant recycling, while Bangladesh and Pakistan lag behind due to limited infrastructure and certified capacity. Overall, shipowners remain cautious, weighing regulatory developments against the economic benefits of keeping older ships in active operation, while high freight rates and increased ship values make recycling economically unprofitable, despite the need to renew the fleet.
Coming to a close in 2025, the tanker sector is in an advantageous position, having accumulated funds that enable the acceleration of digital and green transformation. Using AI to optimize fuel consumption and strategically managing “compliance credits” through pooling will be key to staying competitive in 2026. Tanker shipping proved in 2025 that it can be both profitable and adaptable, laying the foundation for a new era of energy transport.
Containers
While other sectors, such as tankers, clearly benefited from geopolitical tensions, the container sector found itself caught between the historically high delivery of new ships and the need for continuous fleet rerouting due to the Red Sea crisis. The year began with an illusion of stability that quickly turned into a continuous effort by shipping alliances to contain the collapse of freight rates, while at the same time being called upon to manage the huge costs of the green transition and integration into the European emissions trading system.
The picture in the field of container ships was much more complex and often contradictory. Throughout 2025, the industry was faced with the specter of oversupply, as mass deliveries of new ships ordered during the pandemic period began to enter the market. This led to a sustained pressure on fares, which in many cases approached pre-pandemic levels.
However, the crisis in the Red Sea and the ongoing rerouting through the Cape of Good Hope acted as an “artificial” capacity limitation, absorbing a large portion of the new ships and preventing a complete market collapse. The second quarter saw temporary price spikes due to supply chain disruptions, but the fundamental situation remained fragile. In the fourth quarter, major shipping alliances tried to manage supply through blank sailings, trying to maintain the viability of their routes. The strategic shift towards green ships has been more pronounced here than in any other sector, with orders for methanol-enabled vessels now setting the new standard for the industry’s leading companies.
Container ship freight rates for 2025 remained at fairly low levels. Despite initial estimates of the return of ships to Suez and promising news of a truce in the Middle East, the situation for freight rates remained the same or fell to lower levels compared to the same period last year.
In the spring of 2025, the interest was monopolized by the tariff exchanges between the US and China, which led to a significant drop in the routes between these countries and, by extension, in the demand for transport by container ships. Although there was a timid rise in freight rates in early June due to an increase in bookings and congestion at some East Asian ports, demand did not remain at the expected high levels.
The rest of the year was marked by strong market uncertainty, as demand remained at very low levels and there was a strong increase in available ship capacity.
Table 3: Container Market Analysis, Source: Authors Edit
The fourth quarter of 2025 came to confirm the ominous forecasts for structural oversupply, as ship deliveries reached their annual peak. Shipping alliances have been in a constant process of restructuring their networks, trying to balance increased fuel costs from longer routes and the need for slower speeds (slow steaming) to reduce emissions.
The Red Sea crisis, which remained active in Q4, acted as the market’s only “relief valve”, as without the reroutes, freight rates would have fallen to levels below operating costs. The companies’ strategy at the end of the year focused on securing long-term contracts with large shippers, offering “green alternatives” through ships using biofuels or methanol to pass on part of the cost of the EU ETS.
In contrast to the downward trend in freight rates, the market for newbuildings for 2025 was quite active. With uncertainty in the Middle East remaining, but also the need to comply with new international environmental regulations, the companies in total have delivered orders for about 600 new ships with a total capacity of about 5 million TEUs which are expected to be delivered on average over three years. This increase breaks the records of 2021 and 2024, but at the same time causes concern to analysts, as it is possible that supply in the future will exceed demand, causing freight shocks again. Methanol has established itself as the preferred fuel for new containerships. Orders for dual-fuel ships dominated Korean and Chinese shipyards, despite high prices and long lead times. As for the second-hand and scrapping markets, this year they showed weak activity due to the preference of companies to build new ships.
LNG/LPG
Throughout 2025, the LNG and LPG markets were characterised by exceptional volatility, large oversupply and gradual rebalancing due to a recovery in demand and fleet renewal. The year started with historically low LNG freight rates, as large fleet growth and low seasonal demand pushed revenue from spot trading to historically low levels in early 2025.
Conditions improved unevenly during the year: while the first half remained sluggish, the second half saw a sharp decline in LNG availability in capacity due to increased US exports, stronger European demand in winter, geopolitical unrest and weather-related delays.
By the last quarter, LNG freight rates rose to their highest levels in years, with spot gains in the Atlantic exceeding US$100,000/day at times, marking one of the strongest winter markets ever recorded.
In contrast, the LPG sector showed more stability but limited upward trend, supported by solid US exports and demand in Asia, although weaker consumption in Asia and oversupply of ships limited the recovery in freight rates.
In particular, in the LNG and LPG sector, 2025 was marked by a gradual adjustment to an environment of increased ship supply, which led to a relative weakening of freight rates compared to the exceptionally high levels of previous years.
Despite long-term optimism about natural gas as a transitional fuel, the short-term market has faced challenges due to excess capacity. One notable phenomenon recorded in the third quarter was the record number of scraps of older LNG carriers powered by steam turbines, as their low efficiency and stringent regulations made them economically unprofitable. This structural clean-up of the fleet is essential to maintain balance in the market in the coming years.
In the LPG sector, demand remained stable, supported by U.S. exports, although the VLGC market saw some decline in earnings towards the end of the year due to increased capacity supply. Investments in dual-fuel vessels continued to dominate, underscoring the industry’s commitment to reducing its environmental footprint.
Table 4: LNG and LPG Market Analysis, Source: Authors Edit
In this context, the launches of the construction of new ships as well as the purchases with sales followed a clear cycle. At the beginning of the year, the momentum of new shipbuilding remained strong, propelled by decarbonization strategies, IMO pressure, and long-term reliance on natural gas as a transition fuel. However, as the key factors affecting freight rates remained weak and uncertainty about future regulation increased, orders fell sharply in the second half.
Orders for new LNG vessels decreased significantly year-on-year, while vessel buying and selling activity remained selective, focusing almost exclusively on modern, energy-efficient chartered vessels. Older steam turbine LNG ships faced significant depreciation and a decrease in the value of their assets, while LPG ship trading was limited to high-end eco-friendly vessels. To a large extent, the owners prioritized fleet renewal and compliance with IMO regulations.
Ship dismantling activity has become a key balancing mechanism, particularly in the LNG segment. While dismantlings were minimal in the first half of the year due to expectations of recovery, they accelerated significantly from mid-2025 onwards. Older liquefied natural gas carriers with steam turbines were increasingly retired as low profits, high fuel consumption and stricter environmental requirements made their continued operation unprofitable to a break-even degree.
By the end of the year, 2025 was on track to become a record year for LNG ship recycling, helping to partially offset fleet oversupply. In contrast, LPG ship scrapping remained limited throughout the year, as most ships maintained an acceptable profit potential and residual values discouraged any thought of LPG ship scrapping.
Overall, 2025 marked a major turning point for the transportation of LNG and LPG. In particular, short-term volatility and oversupply have gradually given way to stronger key transport parameters, accelerated renewal of the LNG fleet and clearer long-term prospects, supported by the dynamics of the global energy transition and the continued demand for natural gas transport.
Broader context of the shipping market
Geopolitical developments were the imponderable factor that determined the course of shipping in 2025. The prolonged instability in the Red Sea has not only affected fares but completely reshaped global supply chains, making longer routes the new normal. This situation has significantly increased fuel consumption and, consequently, emissions, exposing shipping companies to higher costs under the EU ETS. At the same time, sanctions against Russia and the emergence of the so-called “shadow fleet” have created a two-speed environment in shipping, with significant risks to maritime safety and environmental protection. The introduction of strict frameworks for STS shipments from countries such as South Africa, as mentioned in the third quarter, is a reaction to precisely these risks. Geopolitical frictions between the US and China have also influenced investment decisions, with the threat of tariffs on Chinese-built ships causing turmoil in companies’ planning.
In terms of fleet management strategies for 2025-2026, the focus shifted decisively towards decarbonisation and the use of the new regulatory credits. The implementation of the EU ETS in 2025, with the obligation to cover 70% of emissions, created a huge financial burden, which is estimated to reach $2.9 billion for the whole year. In this context, companies have started to adopt sophisticated “compliance credits” management strategies through the FuelEU Maritime Regulation. This regulation allows for “pooling” of ships, where surpluses from ships using green fuels (such as biofuels or e-fuels) can compensate for the deficits of older ships in the same fleet. This strategy is crucial for 2026 as the demands become even more pressing. Additionally, the ability to “bank” credits from 2025 for use in 2026 offers necessary flexibility. Companies are now investing massively in digital AI platforms to optimize speed and route, while investments in technologies such as carbon capture (CCS) and wind assistance are gaining traction as means to reduce the cost of pollutants. Shipping in 2026 will be an industry where the ability to manage carbon emissions will be as important as the ship’s operational capacity.
To sum up, 2025 has been a year of adaptation and preparation for the future. The shipping industry has once again demonstrated its ability to navigate uncharted waters, balancing geopolitical crises with stringent environmental imperatives. The challenges for 2026 remain great, but the foundations laid in 2025 in terms of technology and regulatory compliance point the way towards greener and more sustainable global merchant shipping.
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*Dr Michael Tsatsaronis Asst. Professor of Quantitative Methods and Risk Management in Shipping Department of Port Management & Shipping School of Economics and Political Sciences National & Kapodistrian University of Athens, Greece
