In this episode of Capital Link’s Spotlight Podcast Series, DHT Holdings (NYSE:DHT) President and CEO, Mr. Svein Moxnes Harfjeld, explains how the crude tanker market has entered a new phase, supported by years of underinvestment in new hat is becoming old and limited.

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According to Mr. Harfjeld, recent strength in tanker markets has not been driven by geopolitical disruptions, but by structural factors developing over time. Years of uncertainty around fuel technologies, environmental regulation, and peak oil demand led owners to avoid ordering new vessels. As a result, fleet growth has been limited while the existing fleet continues to age.

Shadow Fleet Concerns

Mr. Harfjeld expressed concern over the growing shadow fleet and what he sees as insufficient regulatory oversight.

"What I’m a bit saddened about is that IMO is not stepping up efforts," he warned.

He called for stronger enforcement before a major incident forces action, urging the IMO to ensure flag states have adequate capability to oversee modern tanker operations.

Financial Discipline

When asked what differentiates successful tanker companies, Mr. Harfjeld pointed to financial discipline. Shipping carries significant operational leverage, making excessive debt particularly risky.

"A tanker business has significant operational leverage. And I think, operational and financial leverage over time can be a very dangerous mix," he said.

DHT maintains a conservative balance sheet and limited leverage. He pointed to privately owned Greek tanker companies as examples: "They have very strong balance sheets and are able to invest, react and survive through the cycles accordingly," he noted.

Fleet Growth and Capital Allocation

DHT has expanded its fleet with four VLCC deliveries this year and another vessel secured for 2028. However, rising asset values and limited seller interest have made further expansion more challenging.

While the company remains open to growth, Mr. Harfjeld said ordering vessels far into the future is becoming less attractive. DHT instead prioritizes financial flexibility and selective opportunities within its VLCC focus.

Strait of Hormuz Risk

Mr. Harfjeld identified the Strait of Hormuz as the most critical near-term risk. While avoiding geopolitical speculation, he stressed that a prolonged closure would have major consequences for global energy markets and economic stability. "The world’s two biggest economies, the United States and China, are both well aware of the potential damage an extended closure can do," he said.

Although disruptions can support tanker rates through longer voyages, he cautioned that a sustained shock could ultimately weaken global demand.

Long-Term Oil Demand

On oil demand, Mr. Harfjeld said DHT’s research suggests peak demand is still more than a decade away. Even after peak, he expects consumption to plateau rather than decline sharply.

For tanker markets, a sustained plateau would still require significant crude movements globally, supporting demand well into the next decade.

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