QUESTION: Mr. Armstrong, about half the cargo ships are headed to the US to get oil. Some have claimed that Trump is making an attempt to interchange the Center East. This appears to be a conspiracy concept that contradicts what you could have reported. What do you make of that?
RW
ANSWER: I do know, there are wild conspiracy theories being proposed. I’ve even heard that Trump did this to pressure the EU to break down. Sending the world into recession/melancholy is absurd. Trump is making an attempt to promote extra widgets, not fewer. Plus, rising oil costs put the Midterms in danger. That simply is mindless. Most of those conspiracy theories assume the folks in authorities are sensible – that’s NOT the case.
As for tankers, there are usually not sufficient on the planet to move all of the oil that must be transported. We now have had a number of the world’s largest shippers as purchasers for many years. There may be what is called “Tonne-miles” (or tonne-kilometers), which is the usual unit for measuring freight transportation quantity, and it’s a key metric for understanding crude oil logistics.
A single ton-mile represents transferring one ton of cargo over a distance of 1 mile. Within the oil trade, a “ton” of crude oil is roughly 7.5 barrels. This metric permits you to instantly examine the full transport “work” executed by completely different modes (pipeline, rail, ship, truck), whatever the cargo measurement or distance.
Probably the most notable shift within the knowledge is from water carriers to pipelines. In 1980, water carriers held a slight lead over pipelines for crude oil ton-miles. By 1999, pipelines had grown their share to over 75%, whereas water carriers had dropped to below 24%.
On a worldwide scale, the main target shifts to seaborne commerce, which is measured in tonne-miles (the metric equal). Latest knowledge reveals this can be a large and rising trade, at the moment being reshaped by geopolitical occasions. International oil tonne-miles (for all merchandise) grew from roughly 15.3 trillion in 2020 to 16.4 trillion in 2024, a rise of about 6%. Crude oil itself constitutes roughly 70% of complete world seaborne tonne-miles.
In 2025, the worldwide determine stood at roughly 12.2 trillion (year-to-date), indicating a contraction. This decline is partly as a result of rerouting of tankers away from the Crimson Sea due to Houthi assaults, which prompted tanker tonne-miles to hit a five-year excessive earlier in 2024 earlier than the present dip. The rationale that is essential to our evaluation is that this can be a core measure of financial exercise. The overall quantity of crude oil moved is a key enter for GDP figures, whereas adjustments in tonne-miles have an effect on the prices of vitality and client items.
This enables for a direct comparability of effectivity between modes. For instance, pipelines and enormous tankers are way more energy-efficient per ton-mile than vans or rail. Some have a look at this additionally as a carbon footprint and different environmental prices of transporting crude oil over lengthy distances. Vitality firms and governments depend on tonne-mile forecasts to resolve the place to construct new pipelines, develop ports, or spend money on rail infrastructure.
The longer the journey to move oil the upper the associated fee to ship that oil. Subsequently, we’ve got one other variable right here concerning the price of delivery. On high of all of this, the declare that america is someway displacing Iran is de facto absurd. The USA is a NET IMPORTER of crude oil. We might be able to facilitate some for geopolitical causes and to attempt to hold costs down, however the US can in no potential manner change the Center East. Who ever makes up these tales are actually past hope.
