The tanker market in late March 2025 is a tale of contrasts and catalysts. VLCCs hold steady with subtle gains, buoyed by U.S. Gulf tightness and Venezuelan export curbs, while Suezmax firms in the Atlantic but faces supply headwinds. Aframax rates explode, driven by Mediterranean frenzy and Canadian crude rerouting, and clean tankers—LRs, MRs, Handymax—see mixed fortunes with Eastern strength fading. U.S. tariffs on Venezuelan oil buyers, a Russia-Ukraine maritime truce, and Thailand’s rail bypass plan shake up trade flows. Iran’s forged Iraqi documents and Saudi production whispers add intrigue. It’s a market balancing resilience with disruption—rates are up, but risks are stacking.

This update dives into VLCC, Suezmax, Aframax, and LR/MR/Handymax trends, unpacking the forces at play. From freight surges to geopolitical pivots, here’s the detailed scoop—clear and grounded.

⏬ VLCC Market: Holding Firm Amid Flux

Very Large Crude Carriers (VLCCs), the titans of oil transport, trudged along with Middle East Gulf-to-China (TD3C) rates easing to WS 58.95, yielding a round-trip TCE of $39,224 per day as of March 28.

West Africa-to-China (TD15) slipped to WS 59.88 ($40,899/day), but U.S. Gulf-to-China (TD22) climbed to $8.522M ($45,838/day), up $262,555, reflecting a tight position list in the Gulf.

Modern tonnage for MEG eastbound runs is scarce, pushing charterers to older ships or ex-dry dock options at discounts—West Africa and Brazil offer more breathing room with balanced supply.

U.S. tariffs (25%) on Venezuelan oil buyers—effective March 25—slashed loadings at Jose port, with Chevron’s exit looming by May 27, dropping March exports from 15 to 7 cargoes.

Venezuela’s 790,000 bpd February exports (256,000 bpd to U.S.) now face rerouting—Arctic Securities sees VLCCs gaining from longer hauls like Canada or Saudi Arabia replacing them.

Breakwave suggests Saudi Arabia might flood markets as in 2015, potentially driving VLCC rates to $100,000/day if OPEC+ unwinds 2.2M bpd cuts starting April.

Clarksons notes a $48,800/day fleet average on March 26, down 4%—rates ticked to $46,263 by Friday—showing steadiness despite cooling from a $47,834 peak on March 19.

Iraq’s oil minister flagged Iranian tankers using forged Iraqi manifests—U.S. seizures in the Gulf underline Trump’s “maximum pressure” on Iran, tightening shadow fleet scrutiny.

Thailand’s $29bn Landbridge rail could bypass Malacca by 2030, trimming 2,000 km off VLCC routes—though years away, it’s a future wildcard.

MOL and CMB.Tech’s ammonia-fueled bulkers (not tankers) signal decarbonization’s ripple—VLCCs might feel fuel shifts later.

The market’s “steady as she goes”—U.S. Gulf strength and tariff fallout keep it afloat, but oversupply risks loom if Saudi acts.

⏳ Suezmax Market: Atlantic Rises, Clouds Gather

Suezmax, the mid-tier crude haulers, saw Nigeria-to-UK (TD20) rates rebound to WS 102.92 ($45,125/day) by March 28, up 7 points, fueled by U.S. Gulf momentum.

Guyana-to-UK (TD27) rose to WS 100.28 ($43,322/day), while CPC-to-Med (TD6) held steady at WS 130 ($63,123/day)—Middle East-to-Med (TD23) lingered at WS 93-94.

U.S. Gulf spiked to 145kt x WS 92.5, a $6,000/day TCE edge over TD20’s last-done WS 97.5—owners push for WS 100, a threshold narrowly missed last week.

Aframax support lifts both Atlantic sides—only one firm U.S. Gulf-to-TA option exists, with others tied to shaky schedules, tightening the squeeze.

Charterers snapped up West Africa and South Africa openers, thinning front-end lists—Eastern ballasters to Cape of Good Hope got nabbed, hinting at a post-weekend ease.

Clarksons pegged a $43,400/day average on March 26, down 1.4%—Atlantic firmness contrasts with supply creep that could stall gains next week.

Russia-Ukraine maritime truce (March 25) may cut Black Sea risks—Clarksons sees no volume shift yet, but safer Russian crude could draw ships.

The outlook’s firm for now—U.S. Gulf and Atlantic demand prop rates, but tonnage relief might cap the climb soon.

⏱️ Aframax Market: Europe Ignites, Rates Rocket

Aframax, the nimble crude movers, erupted—Clarksons’ fleet average hit $45,800/day on March 28, up 13% daily, 52% weekly, and 72% monthly.

Cross-Mediterranean (TD19) soared to WS 198 ($69,372/day) by March 28, a 69-point leap—eco-ships touched $67,000/day Friday, up 88% week-on-week after a $51,200 peak.

North Sea (TD7) jumped to WS 126.67 ($43,100/day), a 19-point gain—U.S. Gulf-to-UK (TD25) rose to WS 182.5 ($47,747/day), and Mexico-to-Gulf (TD26) hit WS 189 ($49,644/day).

Signal Ocean ties the surge to U.S. 10% tariffs on Canadian crude—Europe (UK, Netherlands) absorbs 69% of redirected barrels, with Aframaxes hauling over 75%.

Mediterranean fixing for April stems slashed tonnage—Fearnleys notes shrinking lists and few U.S. Gulf ballasters, driving rates skyward.

North Sea lagged but firmed to $46,900/day Friday—consistent cargo could push it higher as ships chase hotter markets.

CPC output stays quiet for Aframaxes—rates there await a spark, while U.S. Gulf-to-Europe eco-runs hit $43,700/day, up 38% weekly.

Clarksons calls it a “flurry of activity”—Med’s 57% weekly growth leads, but parity with Suezmax TCEs might temper the frenzy soon.

Russia-Ukraine truce hasn’t shifted volumes—ABG Sundal deems it “inconsequential” for now—focus stays on European demand.

Positive owner sentiment rules—Aframax outpaces bigger peers, with Q2 looking rosy if Canadian flows hold.

1 Year T/C - VLCC SUEZMAX AFRAMAX ECO / SCRUBBER - March 26th

⏸️ LR/MR/Handymax Market: Clean Hits a Wall

LR2s, the large clean tankers, hit a plateau—TC1 (75kt MEG/Japan) fell from WS 163.61 to WS 153.33, and TC20 (90kt MEG/UK) dropped $243,000 to $3.956M by March 28.

West of Suez, TC15 (Med/East) dipped to $2.985M—stable but softer—Eastern petrochemical demand eased, cooling last week’s spike.

LR1s bucked the trend—TC5 (55kt MEG/Japan) rose to WS 180.94, and TC8 (65kt MEG/UK) climbed to $3.33M—UK’s TC16 edged to WS 115.94, up 2.81 points.

MRs in the MEG retreated—TC17 (35kt to East Africa) lost 27.5 points to WS 237.5—while UK’s TC2 (37kt to U.S. Atlantic) peaked at WS 195, settling at WS 185.63 ($29,086/day).

U.S. Gulf MRs surged—TC14 (38kt to UK) hit WS 136.79, TC18 (to Brazil) reached WS 201.43, and TC21 (to Caribbean) jumped 38% to $839,286—basket TCE rose to $31,802.

Handymax softened—Med’s TC6 fell to WS 248.89 (down 30 points), and UK’s TC23 dropped to WS 198.06—last week’s Baltic gains faded.

Eastern strength wanes—naphtha pull subsided—U.S. Gulf enquiry cleared prompt ships, lifting rates there instead.

MOL’s ammonia-ready chemical tankers (2028-2029 delivery) hint at clean fuel shifts—today’s rates feel current supply more.

⏳ What’s Shaping It: Tariffs and Truces

U.S. 25% tariffs on Venezuelan oil buyers and Chevron’s exit cut exports—VLCCs eye longer hauls—China and Iran bristle.

Canadian crude tariffs (10%) reroute barrels to Europe—Aframax thrives—Signal Ocean sees it lasting into Q2.

Russia-Ukraine maritime truce eases Black Sea risks—no volume boost yet—sanctions relief tied to Russia’s grain trade.

Iran’s forged Iraqi manifests dodge U.S. pressure—Iraq denies involvement—shadow fleets adapt.

Thailand’s Landbridge and Saudi supply hikes loom—OPEC+ cuts unwind could flood tankers by late 2025.

🌐 Outlook: Hot Spots, High Stakes

VLCCs hover near $45,000-$50,000/day—Saudi moves or Venezuelan gaps could spike it—steady for now.

Suezmax holds $43,000-$63,000/day—Atlantic’s firm, but supply might cool it—watch U.S. Gulf.

Aframax rides $45,000-$67,000/day—Med and Europe lead—Canadian crude keeps it cooking.

Clean tankers split—LR1s and U.S. MRs gain, LR2s and Handymax ease—East fades, West rises.

💬 Your Take?

Aframax boom or VLCC sleeper? Drop your thoughts—let’s unpack it! 🚢

$NAT (-3.99%)

$FRO (-5.69%)

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$OET (-4.5%)

$HAFNI (-4.46%)

$DHT (-4.59%)

$TNK (-5.01%)

$ASC (-7.94%)

$INSW (-7.86%)

*The Worldscale (WS) rate is a system used to calculate tanker freight rates, where WS 100 represents a standard base rate for a specific route. Rates above or below this benchmark indicate how much more or less a charterer will pay relative to the base cost. A higher WS rate means better earnings for shipowners, while a lower WS rate means lower transportation costs for charterers.

The tanker market in late March 2025 is firing on multiple fronts. VLCC rates shot up as Middle East cargoes snapped up ships, while Suezmax hit a yearly high in the Mediterranean with Kazakh oil pumping strong. Aframax lags with patchy demand, but clean tankers—LRs, MRs, and Handymax—are riding an Eastern wave of gains. U.S. sanctions are slamming shadow fleets, proposed port fees on Chinese ships spark debate, and Red Sea tensions stretch routes. Venezuela’s export shake-up looms, and Russian oil keeps flowing through sneaky transfers. It’s a high-stakes scene with solid rates and big uncertainties brewing.

This update breaks down VLCC, Suezmax, Aframax, and LR/MR/Handymax trends, plus the forces rocking the boat. From freight spikes to geopolitical jolts, here’s the full picture—laid out clear and simple.

⏬ VLCC Market: Rates Jump, Eyes on April

VLCCs, the giants of crude shipping, saw rates leap to $52,100/day on Middle East-to-Asia runs—a 33% weekly jump—as Saudi April cargoes drained a tight tonnage pool.

A MEG/Korea trip hit WS 67.5 ($51,536/day TCE), nudging toward WS 70, while West Africa to China (TD15) climbed to WS 66.75 ($49,598/day) and U.S. Gulf to China (TD22) rose to $7.797M ($40,321/day).

Atlantic support comes from Brazil and West Africa, but U.S. Gulf stumbles—tariff threats of $1.5M per port call on Chinese-built ships slow exports, though TD22 gained $455,000.

Sanctions nabbed five VLCCs like Kohana (Iran-linked) and tracked Sovcomflot’s STS off Hong Kong—700,000 barrels to Hannah—yet India (1.6M bpd) and China keep Russian oil flowing.

Venezuela’s 790,000 bpd exports face a Chevron $CVX (-6.89%) exit—Clarksons predicts a 0.5% tonne-mile boost if Middle East crude fills the U.S. gap.

The Daban’s month-long Russian oil trek ended in Qingdao, dodging sanctions via three Sovcomflot Aframaxes—shadow fleets adapt fast.

Fearnley sees yields over 10% for Frontline $FRO (-5.69%) and DHT $DHT (-4.59%) —rates could stick above $50,000/day if April stays hot, though futures lag the spot surge.

Activity’s set to hum—Atlantic production rises as peak export season nears, keeping owners hopeful.

⏳ Suezmax Market: Med Peaks, West Wavers

Suezmax in the Mediterranean soared to $63,000/day—a year-high—driven by 38 CPC cargoes from Kazakhstan’s Tengiz field (960,000 bpd via Black Sea).

Globally, rates averaged $52,000/day, up 21%, but Nigeria to UK (TD20) slipped to WS 95.56 ($40,980/day), and CPC/Med (TD6) eased to WS 129.25 ($62,910/day).

West Africa and U.S. Gulf softened—TD20 dropped 7 points, and a Wilhelmshaven relet fell to WS 92.5 after a WS 100 sub—charterers dodged a hike past WS 90.

Germany seized the Eventin (152,000 dwt) with Russian oil in the Baltic—a $30M prize—signaling rare crackdowns on shadow fleets.

Middle East’s TD23 held steady at WS 92.5-93, despite ships shifting west—9M barrels head to Asia in March, 3M more booked for April.

Ukrainian drone hits on CPC pipelines didn’t dent loadings—Kazakh cuts for OPEC+ loom, but no big slowdown shows yet.

Allied notes Western momentum, though Atlantic demand lags—rates might climb further if tonnage stays tight and Asia pulls more.

Owners eye a spillover—West Africa’s steady gains could tighten things up if Med strength holds.

⏱️ Aframax Market: Flat but Flickers

Aframax, the smaller crude runners, stayed muted—North Sea’s TD7 parked at WS 107.5 ($25,500/day), while U.S. Gulf’s TD26 rose to WS 135.83 ($26,577/day).

Mediterranean’s TD19 ticked up to WS 120.61 ($29,000/day), but demand’s weak—March stems are scarce, pushing dates to early April.

U.S. Gulf to UK (TD25) gained to WS 145.56 ($34,697/day), hinting at life as ships ballast out—sanctions hit three Sovcomflot units like Volans.

Russian oil STS off Hong Kong (700,000 barrels) and Nakhodka Bay glitches (e.g., Canis Power) highlight shadow fleet risks—lists still show surplus tonnage.

CPC Aframax loadings fell to 25 in February from 33, with Suezmax taking the load—Kazakh shifts keep things lopsided.

North Sea and CPC lack punch—U.S. firming could lift rates to $30,000/day, but it’s a waiting game for now.

Owners see quiet fixes—consistency’s missing, though Atlantic flickers offer a slim chance of a push.

1 Year T/C - VLCC SUEZMAX AFRAMAX ECO / SCRUBBER - March 19th

⏸️ LR/MR/Handymax Market: Clean Gains East

LR2s in the MEG topped out at WS 166.94 on TC1 (75kt to Japan), now WS 164.17, with TC20 to UK at $4.2M—Med/East (TC15) dipped to $3.04M.

LR1s climbed—TC5 (55kt MEG/Japan) reached WS 180.94, TC8 to UK hit $3.33M—while UK’s TC16 stayed flat at WS 112.5.

MRs roared in the MEG—TC17 to East Africa soared to WS 262.86—UK’s TC2 rose to WS 172.5 ($21,004/day), and U.S. Gulf’s TC14 jumped to WS 121.79.

Handymax rallied—Med’s TC6 hit WS 268.33, UK’s TC23 crossed WS 200 to WS 207.5—naphtha demand from Asia’s petrochemical boom drives it.

Sanctions cut scrubber premiums to $400/day—VLSFO ($497/tonne) edges out HSFO ($439.50)—some owners ditch scrubbers for profit.

U.S. Gulf MRs woke up—TC18 to Brazil hit WS 175.71, TC21 to Caribbean rose 40% to $617,857—Atlantic TCE basket climbed to $27,847.

Eastern rates rule—West gains traction, but Asia’s petrochemical pull keeps clean tankers humming strong.

🌐 What’s Stirring It: Sanctions and Shifts

U.S. sanctions target Iran (Shandong refiner, eight tankers) and Russia (Sovcomflot STS)—India, China, and Venezuela (790,000 bpd) adapt fast.

FMC eyes chokepoints (e.g., Suez) for bans—$1M-$100M fees on Chinese ships could clog U.S. ports, says Bimco—coal and grain face big cost hikes.

Red Sea airstrikes vs. Houthis stretch routes—Clarksons sees container rates up by June—crude pivots to Atlantic as Russia/Iran tighten.

Kazakh CPC oil (960,000 bpd) and Asian demand juice Suezmax and clean tankers—U.S. Gulf lags under tariff clouds.

Venezuela’s Chevron $CVX (-6.89%) exit could shift long-haul crude—sanctions and fees might reshape flows, not kill them.

It’s a sanctions-loaded, trade-twisting mix—rates ride high now, but disruption’s lurking.

USS Harry S. Truman carrying out strikes against the Houthis

🚨 Outlook: Hot Streaks, Big Risks

VLCCs might hold $50,000+/day if April cargoes pile on—Atlantic could add steam as exports peak.

Suezmax peaks in the Med at $60,000+/day—West needs a demand jolt—sanctions keep tightening the vise.

Aframax waits for traction—$30,000/day’s in reach if U.S. stirs—clean LR/MR/Handymax bank on Asia’s heat.

Port fees and Red Sea chaos could spike costs—volatility’s brewing, but strength’s got legs for now.

💬 What’s Your View?

Riding VLCC highs, or betting on Suezmax’s Med run? Drop your thoughts—let’s dig in! 🚢

$NAT (-3.99%)

$FRO (-5.69%)

$TRMD A (-8.83%)

$STNG (-9.65%)

$OET (-4.5%)

$HAFNI (-4.46%)

$DHT (-4.59%)

$TNK (-5.01%)

$ASC (-7.94%)

$INSW (-7.86%)

*The Worldscale (WS) rate is a system used to calculate tanker freight rates, where WS 100 represents a standard base rate for a specific route. Rates above or below this benchmark indicate how much more or less a charterer will pay relative to the base cost. A higher WS rate means better earnings for shipowners, while a lower WS rate means lower transportation costs for charterers.

The tanker market in mid-March 2025 shows stark contrasts. VLCCs face an eerie calm in the U.S. Gulf amid Trump’s tariff uncertainty, while Suezmax rates soar with tight tonnage in Europe and West Africa. Aframax softens slightly, as clean tankers—MR and LR—see mixed fortunes: LR2s spike in the MEG, but MRs lag in the U.S. Gulf. New U.S. sanctions on shadow fleet VLCCs and tugs, plus potential Iranian interdictions, rattle the sector, with $1.5M port fees looming for Chinese-built ships. Investors eyeing tanker stocks navigate a landscape of regional strength, geopolitical risks, and trade shifts.

This update covers VLCC, Suezmax, Aframax, MR, and LR trends, plus key external drivers. From rate movements to sanction shocks, here’s the latest—volatility’s in the spotlight.

⏬ VLCC Market: U.S. Silence, MEG Stirrings

VLCC rates edged up slightly, with MEG to China (TD3C) at WS 58.55 ($39,305/day round-trip TCE) and West Africa to China (TD15) at WS 59.63 ($41,173/day TCE).

U.S. Gulf to China (TD22) held at $7.292M ($35,834/day TCE), but spot activity there turned eerily quiet—rates dipped to $35,700/day, a 13.1% weekly drop—as Chinese buyers pause amid Trump’s tariff flux.

Activity picked up late week in the MEG, with 25-31 March cargoes overlapping early April stems, leveling rates as owners resist further downside.

Atlantic tonnage thinned as Brazil and West Africa absorbed ships ballasting from the East, yet U.S. Gulf softness persists—Chinese buyers favor Panama and Canada.

Sanctions hit six VLCCs, including the 300,000-dwt Itaugua, scuppering its recycling deal in Bangladesh.

A Ukraine-Russia ceasefire could flood markets with Russian oil, easing pressure on Iran’s 1.8M bpd exports—VLCCs might see shifts if U.S. “maximum pressure” intensifies.

Investors could find stability in MEG gains, but U.S. uncertainty looms large.

⏳ Suezmax Market: Tightness Drives Gains

Suezmax owners seized momentum, with Nigeria to UK Continent (TD20) jumping 10 points to WS 98.75 ($42,938/day TCE) and CPC to Med (TD6) soaring 23.5 points to WS 123.30 ($57,961/day TCE) for early April stems.

Guyana to UK Continent (TD27) rose to WS 94.17 ($39,899/day TCE), and MEG to Med (TD23) hit WS 92.5—Europe and West Africa cargoes slashed tonnage, forcing charterers to pay premiums for April laycans.

WS 120 was reported on subs for CPC/Med, with sub-price cap Urals trade adding demand pressure.

The U.S. Gulf lags, with tight tonnage undermined by cheaper Aframaxes below WS 145—though thinning Aframax lists for lightering may stabilize rates.

MEG lists are balanced, but Western strength could draw ships via the Cape or Red Sea.

Owners hold the upper hand—investors might see sustained upside if cargo flows persist.

⏱️ Aframax Market: Soft Spots Persist

Aframax markets eased, with North Sea’s TD7 (Cross-UK Continent) flat at WS 107.5+ ($26,000/day TCE) and Mediterranean’s TD19 (Cross-Med) down 5 points to WS 115.39 ($26,200/day TCE). Across the Atlantic, TD26 (Mexico/U.S. Gulf) slipped to WS 126.11 ($22,272/day TCE), TD9 (Covenas/U.S. Gulf) to WS 123.13 ($21,439/day TCE), and TD25 (U.S. Gulf/UK Continent) fell 10 points to WS 131.11 ($29,402/day TCE).

North Sea activity stayed sporadic, pushing natural dates to late March—rates need tighter tonnage to lift.

Mediterranean lists look healthy, but firm Suezmax rates curb part-loading, with third-decade stems fuller than the second.

Sanctions tagged two Aframaxes (e.g., 104,000-dwt Corona Fun), hinting at shadow fleet risks—softness may linger unless regional demand firms.

Investors might eye thinning lists as a potential floor, but gains remain elusive.

1 Year T/C - VLCC SUEZMAX AFRAMAX ECO / SCRUBBER - March 12th

⏸️ MR Market: Steady East, Sluggish West

MR tankers showed regional splits. MEG’s TC17 (35kt MEG/East Africa) hovered at WS 205-210, stable despite LR gains, reflecting consistent demand.

UK-Continent’s TC2 (37kt ARA/U.S. Atlantic) rose from WS 138.75 to WS 159.06 ($18,285/day TCE), and TC19 (37kt ARA/West Africa) climbed to WS 179.69—gradual Western improvement.

U.S. Gulf MRs stalled—TC14 (38kt U.S. Gulf/UK-Continent) stuck at WS 85, TC18 (U.S. Gulf/Brazil) at WS 135-137.5, and TC21 (U.S. Gulf/Caribbean) edged to $414,286—torpid amid tariff uncertainty.

Sanctions hit the 45,700-dwt Polaris 1, signaling shadow fleet exposure.

The Atlantic Triangulation TCE rose to $19,667 from $17,176—MRs hold steady in the East, but Western softness caps upside for investors.

⏹️ LR Market: MEG Strength, Mixed Elsewhere

LR tankers saw MEG-driven gains. LR2s on TC1 (75kt MEG/Japan) spiked 21.67 points to WS 151.67, and TC20 (90kt MEG/UK-Continent) hit $3.89M (twice reported on subs), reflecting hot demand. LR1s followed, with TC5 (55kt MEG/Japan) up 30.94 points to WS 167.5 and TC8 (65kt MEG/UK-Continent) rising to $3.1M—significant weekly jumps.

West of Suez, TC15 (Med/East) ticked to $3.1M, but UK-Continent’s TC16 (60kt ARA/West Africa) dipped to WS 110.94, muted by weak momentum.

DIS’s four Chinese-built LR1s face $1.5M U.S. port fees, potentially skewing trade—owners may sell or reroute.

LR strength in the East offers upside, but Western quietude and tariff risks temper the outlook—investors might weigh regional plays.

🌐 Geopolitics & Risks: Sanctions and Fees Loom

External pressures are mounting. U.S. sanctions hit 10 tankers (six VLCCs, two Aframaxes, one MR, one Panamax) and three tugs aiding Iran’s shadow fleet, disrupting recycling (e.g., Itaugua) and STS ops off Malaysia/Singapore.

A Ukraine-Russia ceasefire could boost Russian oil, easing Iran’s 1.8M bpd exports—U.S. interdiction plans via the Proliferation Security Initiative add uncertainty.

Trump’s $1.5M fees on Chinese-built ships (71% of new tankers) threaten owners like DIS—asset prices could split, with non-Chinese ships rising.

U.S.-China tariffs (20% vs. crude levies) quiet U.S. Gulf VLCCs—investors face shifting flows and cost hikes.

🚨 Outlook: Regional Divides Persist

VLCCs may stabilize if MEG activity holds, but U.S. Gulf weakness and Iran risks cloud the picture—a Russian oil surge could shift demand. Suezmax strength could deepen with tight tonnage—Western demand may pull MEG ships. Aframax softness lingers without cargo lift, while MR and LR shine in the MEG but falter West of Suez. Sanctions and fees could favor non-Chinese tonnage, raising freight costs—investors might find Suezmax and LR upside, tempered by VLCC and Aframax caution.

💬 Your View?

Bullish on Suezmax gains, or wary of VLCC quiet? Share your take—let’s unpack it! 🚢

$NAT (-3.99%)

$FRO (-5.69%)

$TRMD A (-8.83%)

$STNG (-9.65%)

$OET (-4.5%)

$HAFNI (-4.46%)

$DHT (-4.59%)

$TNK (-5.01%)

$ASC (-7.94%)

$INSW (-7.86%)

*The Worldscale (WS) rate is a system used to calculate tanker freight rates, where WS 100 represents a standard base rate for a specific route. Rates above or below this benchmark indicate how much more or less a charterer will pay relative to the base cost. A higher WS rate means better earnings for shipowners, while a lower WS rate means lower transportation costs for charterers.

Week 10 of 2025 delivers a tanker market of contrasts. VLCCs remain flat with balanced tonnage, while Suezmax tightens and lifts rates in Europe and West Africa. Aframax softens under weak demand, as clean tankers—MRs and LRs—display regional divergence: LR2s recover in the East, but MRs face pressure in the West. Geopolitical risks escalate with U.S. tariff threats, potential Iranian interdictions, and Canada’s export surge, impacting $6.7bn of U.S.-listed tonnage. Investors eyeing shipping or oil markets face a blend of stability, opportunity, and uncertainty.

This update spans VLCC, Suezmax, Aframax, MR, and LR trends, plus key external drivers. From rate shifts to regulatory clouds, here’s the latest—volatility remains a fixture.

⏬ VLCC Market: Steady with Latent Potential

VLCCs stayed level this week, with MEG to China (TD3C) at WS* 57.10 ($38,342/day round-trip TCE, up $1,000 w-o-w) and West Africa to China (TD15) at WS 58.50 ($40,633/day TCE). U.S. Gulf to China (TD22) plunged $767,500 to $7.28M ($36,497/day TCE), reflecting a $4,700/day drop. MEG/East rates held at WS 57 for modern ships—older units saw discounts—while West Africa activity rose above WS 60, bolstering owner sentiment despite weak U.S. Gulf exports. Breakwave Advisors flags tight dark fleet supply, with Iran’s February loadings down 37% m-o-m due to “clean” STS vessel shortages and Shandong bans. China’s refining strength (gasoil at historical norms, gasoline two-thirds above) contrasts Brent’s 2021 low—OPEC+ cuts easing and Russia sanction talks could lift VLCCs. Investors might note this stability, with geopolitical shifts as a wildcard.

⏳ Suezmax Market: Tight Lists Push Rates

Suezmax enjoyed a busy Tuesday, with Europe and West Africa cargoes trimming tonnage lists and nudging rates up. Nigeria to UK Continent (TD20) gained 2.5 points to WS 87.83 ($36,548/day TCE), and CPC to Med (TD6) hit WS 100.9 ($39,838/day TCE), while MEG to Med (TD23) reached WS 91. Five cargoes remain open, suggesting further upside as sentiment strengthens—TD20 and TD6 both rose 2.5 points from last fixtures. In the U.S. Gulf, tonnage is tight for March 10-20, with solid WTI exports to Europe, yet Aframaxes at WS 150 snag stems from Suezmaxes. MEG tonnage is scarce, but quiet volume and laycans shifting to mid-March dampen owners’ leverage. Breakwave sees VLCCs leading geopolitically, but Suezmax resilience here hints at regional gains—cargo flow will be key.

⏱️ Aframax Market: Demand Lags, Rates Soften

Aframax markets opened the week quietly in the West. North Sea’s scant activity left a long prompt tonnage list, easing TD7 (Cross-UK Continent) to WS 107.5-110 ($27,000/day TCE) with downward pressure building. Mediterranean/Black Sea demand weakened, dropping TD19 (Cross-Med) 3.5 points to WS 121.28 ($29,733/day TCE), as prompt ships linger and Suezmaxes dominate. In the Americas, Mexico’s stem cancellations tanked TD26 (Mexico/U.S. Gulf) and TD9 (Covenas/U.S. Gulf) 10 points to WS 132.78 ($25,687/day TCE) and WS 130.94 ($24,833/day TCE), while TD25 (U.S. Gulf/UK Continent) fell 15 points to WS 143.89 ($34,447/day TCE). Canada’s Trans Mountain Pipeline spiked exports 59% y-o-y to 373,000 bpd, with Aframaxes (75% of Vancouver loads) serving Asia—yet U.S. tariffs loom large. Ballasting remains viable; softness may deepen without a demand spark.

1 Year T/C - VLCC SUEZMAX AFRAMAX ECO / SCRUBBER - March 5th

⏸️ MR Market: Western Pressure Persists

Medium Range (MR) tankers faced a softening week. MEG’s TC17 (35kt MEG/East Africa) peaked at low WS 220s early but fell to WS 211.79 as activity cooled. UK-Continent’s TC2 (37kt ARA/U.S. Atlantic) dropped from WS 152.5 to WS 135 ($13,500/day TCE), and TC19 (37kt ARA/West Africa) hit WS 157.81 ($19,216/day TCE), chipped away over five days. In the U.S. Gulf, TC14 (38kt U.S. Gulf/UK-Continent) eased to WS 85, TC18 (U.S. Gulf/Brazil) fell to WS 137.86, and TC21 (U.S. Gulf/Caribbean) lost $35,715 to $403,571—bottoming out amid slow demand. Breakwave notes NW Europe CPP loadings supporting TC2, yet rising MR ballasters from a closed U.S. Gulf arbitrage cap gains. Russia’s 9% February diesel drop adds supply pressure—MRs may struggle unless U.S. summer demand shifts the tide.

⏹️ LR Market: Eastern Gains, Western Stagnation

Long Range (LR) tankers showed regional splits. MEG LR2s rose, with TC1 (75kt MEG/Japan) up 6.11 points to WS 130 and TC20 (90kt MEG/UK-Continent) steady at $3.3M, fueled by diesel and jet demand—Breakwave sees light distillates driving Pacific LRs. LR1s lagged, with TC5 (55kt MEG/Japan) down 3.75 points to WS 134.69 and TC8 (65kt MEG/UK-Continent) dipping to $2.67M, reflecting quieter activity. West of Suez, TC15 (Med/East) held at $2.85M, but UK-Continent’s TC16 (60kt ARA/West Africa) fell from WS 123.61 to WS 113.33 as demand faltered. Breakwave flags rising LR availability in MEG short-haul trades, capping rate upside despite naphtha import potential for Asia’s refinery season. LR2 resilience contrasts LR1 and Western softness—watch distillate trends for direction.

🌐 Geopolitics & Risks: Costs and Flows in Flux

External forces are rattling the market. The U.S. considers interdicting Iranian tankers (1.7M bpd exports, a 4-year high) via the Proliferation Security Initiative, risking trade disruptions. Trump’s $1M-$1.5M fees on Chinese-built ships threaten $6.7bn of U.S.-listed tonnage—Teekay Tankers (44.4%), Frontline (35.8%), and others face hikes that could raise freight costs or divert buyers to non-U.S. crude. Canada’s 59% export surge (373,000 bpd) via Trans Mountain aids Aframaxes, but 10% U.S. tariffs cloud the outlook. Breakwave sees VLCCs gaining most from 2025’s turbulence—China’s discounted crude demand persists despite sanctions. Investors might weigh tariff exposure against tonnage tightness—uncertainty’s baked in.

🚨 Outlook: Diverging Fortunes

VLCCs could rise if Russia sanctions ease or Iran flows shift, favoring mainstream tonnage per Breakwave. Suezmax may firm further with Europe/West Africa cargoes, though U.S. Gulf lags. Aframax softness persists without demand, despite Canada’s boost, while MRs face Western pressure and LRs eye Eastern distillate gains. Geopolitical risks—tariffs, interdictions—could lift costs, favoring compliant tonnage, but mute U.S. export edges. Investors might find selective plays—VLCC and Suezmax strength versus MR/Aframax risks—amid a volatile backdrop.

💬 Your Take?

Where do you see tankers heading? Bullish on VLCCs, or wary of MR softness? Share your view—let’s dive in! 🚢

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*The Worldscale (WS) rate is a system used to calculate tanker freight rates, where WS 100 represents a standard base rate for a specific route. Rates above or below this benchmark indicate how much more or less a charterer will pay relative to the base cost. A higher WS rate means better earnings for shipowners, while a lower WS rate means lower transportation costs for charterers.

The tanker market as of late February 2025 is a study in contrasts. VLCC rates oscillate between tight supply and softening sentiment, driven by geopolitical shifts and a wave of new regulations. Meanwhile, Suezmax and Aframax segments wrestle with oversupply and muted activity, though glimmers of demand—like Sudan’s resumed Dar Blend exports—offer some counterbalance. New U.S. port fees targeting Chinese tonnage, sanctions on Iran and Russia, and Trump’s Venezuela policy shift are reshaping the landscape. Oil demand wavers, adding another layer of complexity for shipping investors.

This update dives into the latest across VLCC, Suezmax, and Aframax markets, alongside regulatory and oil market trends. For those tracking shipping stocks or oil-related investments, the mix of risks and opportunities here is worth dissecting. Volatility is the name of the game—let’s break it down.

⏬ VLCC Market: Volatility Holds Firm

VLCCs East of Suez show rates in the high WS 50s to China, a level reflecting recent ups and downs. The market’s been quiet this week with IE Week in London slowing activity, but modern tonnage remains scarce, hinting at potential rate gains once schedules clear. In the Atlantic, it’s a different story—tonnage lists are growing, and a lack of U.S. Gulf business has nudged Brazil-Far East rates down to WS 57.25 as the last done deal. Geopolitical ripples add spice: China’s rebounding imports of sanctioned Russian and Iranian crude are fueling demand for older, unsanctioned VLCCs from the shadow fleet. Yet, U.S. sanctions just hit 5 VLCCs (average age ~19 years), part of an 11% capacity squeeze, while the EU and UK blacklist 153 shadow fleet vessels. This tightens supply for non-compliant routes, particularly Middle East to Asia, but softening Western sentiment and expanding tonnage could cap gains. Investors might note the thin balance here—tightness in the East versus oversupply risks in the West.

Rates - Dirty - Spot WS February 26th 2025

⏳ Suezmax Market: Steady but Under Pressure

Suezmax markets are subdued, with little to report East or West of Suez. In West Africa, available tonnage keeps climbing while cargo volumes stay weak, dragging TD20 rates into the mid-80s—a softening trend mirrored in the broader BDTI index. Stateside, activity is picking up in the U.S. Gulf, but Aframaxes are stealing the show, leaving Suezmax supply in charterers’ favor. At least six safe ships are open for mid-first decade March, suggesting rates for USG/TA runs might correct to WS 75 soon. In the East, surface activity is quiet beyond a few Indian quotes, and older tonnage keeps the market balanced, limiting upside. However, 20T crane-fitted vessels are scarcer, which could lift rates if Basrah barrels surge. A rare bright spot: Sudan’s first Dar Blend cargo in a year—1 million barrels on the Suezmax Toska—departed Monday, hinting at Red Sea demand if exports stabilize. For now, it’s a waiting game—steady, but soft.

⏱️ Aframax Market: Cargo Crunch Persists

Aframaxes are feeling the pinch from limited cargo availability. IE Week has kept surface activity low, and natural dates are stretching to the end of March’s first decade. Larger ships are snapping up stems, leaving fewer opportunities for Aframaxes, while ballasting out remains an attractive option for early tonnage. In the Mediterranean, vessels from the North Sea are adding to an already long list, forcing owners to compete harder for employment. U.S. Gulf action might pull some ships stateside, but without a local cargo boost, it’s unlikely to lift rates here. Sanctions complicate things further—3 Aframaxes (~22 years old) were tagged in the latest U.S. Iran crackdown, part of a 16% capacity hit for this class. On the flip side, Dar Blend’s return (historically 61% Aframax-lifted) could tighten tonnage if Sudan’s exports hold. Investors might weigh this oversupply against niche demand pockets—recovery hinges on volume.

1 Year T/C - VLCC SUEZMAX AFRAMAX ECO / SCRUBBER

🌐 Regulatory Waves: Rising Costs, Shifting Flows

Regulatory changes are shaking the tanker market. The U.S. proposes new port fees—up to $1M-$1.5M per call for Chinese-built or owned ships (21-22% of U.S. trade tonnage), adding $7.14-$21.43/t to Aframax costs. This could make U.S. crude less competitive in Europe, pushing oil firms to favor non-penalized tonnage. Sanctions pile on: U.S. targets 13 Iran-linked vessels (11% VLCC, 16% Aframax capacity), while EU/UK bans on Russian hubs like Ust-Luga and 40 more tankers disrupt shadow fleets. Trump’s plan to revoke Chevron’s Venezuela license by March 1 threatens 209k b/d of Aframax exports to the U.S., likely rerouting VLCCs to Asia and raising freight costs. Syria’s EU sanction relief and Dar Blend’s restart signal potential Mediterranean demand, but uncertainty reigns. These moves could favor compliant tonnage while squeezing margins elsewhere—a mixed bag for shipping profitability.

📈 Oil Market Backdrop: Demand Clouds Form

Oil prices are testing the low end of their range, driven by demand worries. China’s shift to alternative energy weighs on growth forecasts, and OPEC+ may boost output, risking oversupply. Geopolitical tensions haven’t jolted prices, with spare capacity cushioning supply fears. Atlantic basin crude growth supports tanker demand short-term, but gas product gains outpace liquids, tempering upside for crude carriers. Low inventories offer some stability, yet without clearer demand signals, absorbing extra supply remains a question mark. Investors might see this as a neutral-to-bearish signal for tanker reliance—watch China closely.

🚨 Outlook: A Delicate Balance

The tanker market sits on a knife-edge. VLCCs could see rate support from tight modern tonnage and shadow fleet demand, but Atlantic oversupply looms as a counterweight. Suezmax and Aframax segments need cargo volume to halt softening trends—Dar Blend’s return offers hope, though it’s tentative. Regulatory costs and sanctions may bolster compliant tonnage rates while pressuring U.S. export economics. Venezuela’s potential output drop and Russia’s restricted flows add downside risks, offset by Syria’s sanction easing and Atlantic basin growth. For shipping investors, it’s a wait-and-see moment—volatility isn’t going anywhere soon.

💬 What’s Your View?

How do you read the tanker market’s next move? Are VLCCs a buy on tightness, or is oversupply the bigger story? Drop your thoughts—let’s unpack this together!

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The tanker market remains highly dynamic as geopolitical tensions, tightening sanctions, and shifting trade flows reshape vessel demand. VLCC rates have softened, dropping 20% on key Middle East routes, while Suezmax and Aframax segments are holding firm amid tightening tonnage. Meanwhile, new U.S. sanctions on Russian crude trade are forcing Indian refiners to restructure supply chains, and geopolitical tensions in the Baltic are escalating over potential vessel seizures.

With a mix of short-term bearish rate movements and bullish long-term projections, market players are closely watching fleet supply constraints, trade policy shifts, and evolving crude flows to anticipate the next move.

💡 VLCC Rates Under Pressure Despite Tightening Fleet

The VLCC market has come under significant pressure, with rates on MEG/Vietnam slipping to WS 55* and MEG/Korea at WS 54.25*—a sharp 20% drop. The February MEG program remains behind schedule, and with an increasing tonnage list in the Atlantic, charterers remain in control.

Despite the short-term weakness, investment bank Jefferies remains bullish, increasing VLCC price targets and forecasting:

📈 $55,000/day in 2025 (previously $50,000)

📈 $65,000/day in 2026 (previously $57,500)

A key driver of this long-term optimism is the growing impact of U.S. sanctions. The sanctioned VLCC fleet now represents 10% of total tonnage, with potential to reach 15% if further restrictions are imposed. With VLCC utilization rising from 83% to 88%, Jefferies suggests this could climb to 94%, tightening supply and supporting rates.

However, uncertainty looms as the U.S. crude inventory build continues, and a Trump-Putin dialogue on Ukraine has raised ceasefire speculation, leading to a 2.7% drop in WTI crude.

1 Year T/C - VLCC ECO / SCRUBBER

Rates - Dirty - Spot WS* February 12th 2025

🚢 Suezmax & Aframax Segments Hold Firm Amid Market Tightness

While VLCCs struggle, the Suezmax market is proving resilient, particularly in the Atlantic. West Africa activity appears muted on the surface, but tonnage remains tight as off-market fixtures keep vessels occupied. Rates in the U.S. Gulf climbed by 6.25 points, supported by a lack of ballasters from the UKC/Mediterranean due to poor weather conditions.

The Aframax segment also remains strong, although rates have likely peaked after a sharp surge. The recent hike pushed Aframax levels to parity with Suezmax, making it attractive for owners to lock in profits. With some vessels repositioning to the Mediterranean, the potential for replacement rate hikes remains if demand spikes.

1 Year T/C - SUEZMAX AFRAMAX ECO / SCRUBBER

🌍 Geopolitical Tensions: Baltic Confrontation & Indian Refiners' Supply Shift

The Baltic region is heating up, as Russian lawmaker Alexei Zhuravlev warned of retaliatory measures in response to reports that Nordic and Baltic nations plan to seize shadow fleet tankers carrying Russian oil. This raises the risk of direct confrontation, with Europe looking to justify tanker seizures under piracy laws and environmental regulations.

Meanwhile, India’s refiners are scrambling to adjust to fresh U.S. sanctions on Russian oil. With 160 tankers blacklisted, Indian refiners like IOC, Bharat Petroleum, and Reliance are facing the loss of 18-20 cargoes in March—a 14% drop in monthly Russian crude imports.

To adapt, new Dubai-based trading entities are emerging, replacing sanctioned firms. Refiners are also utilizing onshore storage in Fujairah to disguise Russian crude origins, maintaining supply flow despite the latest restrictions.

🚢 The Effect of U.S. Trade Policies & Market Reactions

Beyond sanctions, U.S. trade policy shifts are creating new challenges. Potential tariffs on Mexico and Canada could significantly impact U.S. crude supply chains, leading to:

📊 Higher costs for U.S. refiners

📊 Increased redirection of Mexican fuel oil to Asia & the Caribbean

📊 Ripple effects on Canadian and Mexican export strategies

Meanwhile, Chinese refiners are actively diversifying crude sources, concentrating purchasing power among major players. This shift further consolidates market power in the hands of larger refiners, while smaller players struggle to adapt.

Greek tanker operators remain at the center of these evolving crude flows. Despite rising scrutiny, Greek-owned tankers continue to dominate Russian fuel oil transport, taking advantage of shifting trade patterns as traditional routes become increasingly complex.

🚨 Looking Ahead: Volatility, Risks & Opportunities

The tanker market is at a crossroads, with a mix of bearish short-term pressures and bullish long-term fundamentals:

🔸 VLCC rates under pressure, but Jefferies sees upside in 2025/26

🔸 Suezmax and Aframax markets remain firm, benefiting from market tightness

🔸 Baltic tensions could escalate, impacting shadow fleet dynamics

🔸 India’s crude trade is shifting, as refiners bypass U.S. sanctions

🔸 Oil prices react to geopolitical shifts, with Trump-Putin talks impacting WTI

🔸 U.S. trade policies could reshape crude flows, particularly with Mexico & Canada

As we move through 2025, sanctions, geopolitical risks, and shifting trade routes will continue to create volatility—but also opportunity. Navigating these changes effectively will be key to capitalizing on emerging market dynamics.

💬Let's connect!

What are your thoughts on the latest tanker market developments? Feel free to share in the comments and don't forget to like and share this post 🚢

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*The Worldscale (WS) rate is a system used to calculate tanker freight rates, where WS 100 represents a standard base rate for a specific route. Rates above or below this benchmark indicate how much more or less a charterer will pay relative to the base cost. A higher WS rate means better earnings for shipowners, while a lower WS rate means lower transportation costs for charterers.

As February unfolds, the tanker market is heating up, driven by tightening supply, geopolitical shifts, and a surprising resurgence in VLCC rates. The US crackdown on Iran and the shadow fleet, combined with growing crude exports from the US, Guyana, and Brazil, is stretching mainstream vessel availability. Meanwhile, tanker stocks are rallying as investors anticipate a prolonged upcycle.

📈 VLCCs: Rates Surge as Supply Tightens

VLCC rates saw a surprising rebound this week despite the Lunar New Year lull. Allied reports that time-charter equivalent (TCE) earnings have jumped above last year’s levels, signaling strong demand.

The Middle East Gulf/China route has firmed to the low WS 70s* ( See explanation at end of the post ) , with sentiment pointing to further upside. Owners are in no rush to fix, as the supply of available vessels remains under pressure. Hunter Group estimates that an additional 156 VLCCs could be needed by 2026 to accommodate rising demand, yet only 28 are scheduled for delivery over the next two years.

With more cargoes set to emerge and February being a short month, some profit-taking is expected, but the fundamental tightness in the market remains

1 Year T/C - VLCC ECO / SCRUBBER

🚢 Suezmax & Aframax: Market Holding Firm

The Suezmax market is holding steady, with TD6 (Black Sea/Med) trading at a minimum of WS 92.5*, while TD20 (West Africa/UKC) is fluctuating between WS 90-92.5*. In the East, a recent fixture at WS 105* for a MEG/East run was below expectations, but owners remain optimistic given the tight vessel supply.

For Aframaxes, the North Sea market is stable, with oil company tonnage covering most stems. However, Mediterranean activity is picking up, and with tonnage thinning, rates could soon face upward pressure. The balance between Suezmax and VLCC demand in the region will dictate the next move.

1 Year T/C - SUEZMAX AFRAMAX ECO / SCRUBBER

🛢 Trump’s Maximum Pressure: The Shadow Fleet Dilemma

US President Donald Trump’s renewed maximum pressure campaign on Iran has sent ripples through the tanker market. If fully enforced, Iranian oil exports (1.7M bpd) could be replaced by mainstream Middle East Gulf barrels, requiring an additional 51 VLCCs.

Moreover, stricter sanctions enforcement is already impacting the shadow fleet. Hunter Group reports that many older, sanctioned vessels are now accepting steep discounts on scrap values, signaling potential exits from the market. However, dark fleet scrapping remains challenging, with some owners struggling to find yards willing to take sanctioned tonnage.

Visual by Grok

📊 Tanker Stocks Rally Amid Supply Constraints

Investor sentiment is turning bullish, with tanker stocks in New York and Oslo surging after Trump’s announcement. Frontline ($FRO (-5.69%) ) jumped 7.5% in New York, while DHT Holdings ($DHT (-4.59%) ) rose 3.5%. Analysts believe China will likely cooperate with the US by shifting crude purchases away from Iran, adding demand for an estimated 20-50 VLCCs.

Meanwhile, DHT Holdings posted a strong 2024, with net profits at $181.5M, up from $161.4M in 2023. The company has booked 74% of available VLCC spot days for Q1 2025 at $36,400/day, reflecting confidence in continued rate strength.

🌍 Geopolitics & Trade Flows: What’s Next?

China’s Tariffs on US Oil & LNG: ANZ reports that China’s tariffs on US energy imports are unlikely to have a major impact on oil prices in the short term.

US-Canada-Mexico Tariffs on Hold: The Trump administration has paused 25% tariffs on Canadian and Mexican imports for at least 30 days, reducing uncertainty in North American energy flows.

📈 Looking Ahead: Bullish Sentiment Grows

With VLCC supply historically tight, the orderbook at record lows, and sanctions reshaping trade flows, tanker fundamentals remain firmly in owners’ favor. As geopolitical tensions escalate and crude exports rise, the market is primed for further upside.

💬 Let’s Connect!

Will VLCC rates push past WS 80*? Will shadow fleet scrapping accelerate? Feel free to share in the comments and don't forget to like and share this post 🚢

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*The Worldscale (WS) rate is a system used to calculate tanker freight rates, where WS 100 represents a standard base rate for a specific route. Rates above or below this benchmark indicate how much more or less a charterer will pay relative to the base cost. A higher WS rate means better earnings for shipowners, while a lower WS rate means lower transportation costs for charterers.

As January draws to a close, the tanker market remains in flux, shaped by a combination of sanctions, shifting trade flows, and volatile freight rates. The surge in VLCC rates seen earlier this month, driven by new US sanctions on Russia’s shadow fleet, has now cooled as vessel availability has increased, the Chinese New Year slowdown has taken effect, and market uncertainty persists. However, the long-term fundamentals continue to suggest that renewed volatility is likely in the months ahead.

📉 VLCC Market Cools, But Volatility Looms

After spiking to seven-month highs following the implementation of new shipping sanctions, VLCC rates have since softened, reflecting a temporary lull in demand. The Chinese New Year holidays have slowed trading activity, particularly in the Middle East Gulf, where fewer cargo inquiries have put downward pressure on freight rates. Despite this short-term dip, the Atlantic VLCC market has remained active, with eastern buyers aggressively sourcing alternative crude supplies at discounted prices. The WTI/Dubai spread currently favors US crude, and with the March US Gulf export program expected to be substantial, rates could soon rebound. The thinning position list suggests that downside risk is limited, and market sentiment points to an eventual upward shift in rates once trading resumes in earnest.

1 Year T/C - VLCC ECO / SCRUBBER

🚢 Suezmax & Aframax: Market Divergence

While VLCC dynamics have fluctuated, the Suezmax and Aframax segments have followed distinct trends. The Suezmax market continues to face oversupply, with an abundance of available vessels keeping freight rates subdued. The only exception has been the Black Sea, where increased forward fixture activity has allowed rates to hold steady. Meanwhile, the West African market has seen rates decline to WS 75 on the TD20 route due to muted demand, while the US Gulf has remained quiet with rates stuck around WS 65 for transatlantic voyages. In the Middle East Gulf, spot activity has been limited, keeping rates for eastbound cargoes just above WS 105.

Aframax markets, on the other hand, have seen significant disruptions following the latest US sanctions on Russian oil shipments. The cost of transporting ESPO crude out of Russia’s Pacific port of Kozmino has skyrocketed, with Aframax freight rates tripling to over $6.5 million. This spike has widened the price gap between buyers and sellers, stalling Asian trading for March-loading cargoes. In the North Sea, Aframax availability has tightened as vessels reposition to the Atlantic in response to growing demand for transatlantic voyages. Meanwhile, the Mediterranean market, which initially weakened following concerns over potential closures at Libya’s Es Sider and Ras Lanuf terminals, has since stabilized as operations at both ports resumed.

1 Year T/C - SUEZMAX AFRAMAX ECO / SCRUBBER

🛢 Sanctions & Supply Chain Disruptions

Beyond freight rate movements, Russian crude exports continue to face mounting challenges. At Ust-Luga, one of Russia’s key Baltic export terminals, tanker loadings have fallen to a four-year low of 350,000 barrels per day due to a combination of technical issues and the impact of US sanctions. Traders report that the port’s reduced throughput has added to Russia’s export difficulties, particularly as newly sanctioned vessels struggle to find buyers.

Meanwhile, Indian and Chinese refiners have encountered growing logistical hurdles as sanctioned tankers begin arriving at ports, leading to unexpected delays in cargo discharges. Indian refiners, in particular, have started to pivot toward alternative sources, increasing purchases from the Middle East, Africa, and the US to compensate for declining Russian volumes.

" Russian Shadow Fleet " by Grok

🌍 OPEC+, Oil Prices & Trump’s Energy Moves

Oil prices, which had recently surged to multi-month highs, have retreated following renewed political uncertainty surrounding US energy policy. Former President Donald Trump’s return to the global stage has introduced conflicting signals regarding future oil supply. On one hand, he has expressed a desire to refill the US Strategic Petroleum Reserve (SPR) “right to the top,” a move that would require sourcing large volumes of imported sour crude. On the other, he has called for increased domestic oil production, a policy that could put downward pressure on global crude prices. Analysts believe that any effort to replenish the SPR would likely support demand for VLCC and Suezmax tankers, as the US would need to import significant crude volumes from the Middle East.

At the same time, the OPEC+ alliance is preparing to meet on February 3 to review its supply curbs. Market expectations, according to ANZ, suggest that the group will maintain its current production cuts through the first quarter before potentially unwinding them in April. However, with Chinese demand still failing to deliver a meaningful recovery, it remains unlikely that OPEC+ will agree to any production increases in the near term.

By Grok

📈 Looking Ahead: Market Poised for Further Shifts

As the Chinese New Year holiday period comes to an end, tanker demand is expected to rebound, particularly as US crude exports ramp up and trade routes continue to evolve. Geopolitical uncertainties, from US sanctions enforcement to OPEC+ production policies, will remain key variables shaping freight market dynamics. Furthermore, with the global tanker fleet experiencing historically low supply growth and a tightening orderbook, freight rate volatility is set to persist through 2025.

💬 Let’s Connect!

What are your thoughts on the tanker market ? Feel free to share in the comments and don't forget to like and share this post! 🚢

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The tanker market continues its dynamic and volatile ride into 2025, with spot market rates soaring to new heights, particularly for VLCCs. Over the past month, the Middle East to China route saw VLCC rates jump by 39%, reaching $37,800/day. This surge comes on the heels of the latest US sanctions package, which has now impacted over 270 vessels, including a significant portion of the shadow fleet that was previously involved in Russian, Iranian, and Venezuelan crude shipments.

As a result, the market is experiencing an intense scramble to secure non-sanctioned vessels, further pushing rates higher. The rise in demand is particularly visible with Chinese and Indian refiners, who are adjusting their supply chains to compensate for the reduced availability of tankers.

💡 Sanctions and Fleet Shortages Drive Up Rates

The tightening of available vessels due to sanctions has intensified competition across various tanker segments. The surge in the spot market rates for VLCCs has caused significant shifts in trade routes. Charterers are increasingly looking to secure tankers for longer-term deals to hedge against rising freight costs. However, the term market has been impacted by the rising rates, with some term deals failing as charterers became nervous about locking in deals at what they perceived as “toppy” rate levels.

For instance, the Agneta Pallas III, which was initially fixed at $50,000/day for a term of 8-10 months with Trafigura, was later re-fixed at a higher rate of $55,000/day with Gunvor, showcasing the ongoing volatility in the market. Other deals, such as those involving Mercuria and Trafigura, also fell through as charterers hesitated to commit to long-term rates that seemed too high given the rapid escalation in spot rates.

1 Year T/C - VLCC ECO / SCRUBBER

🚢 Impact on Suezmax & Aframax Markets

While the VLCC market is leading the charge, Suezmax and Aframax markets are also benefiting from the ripple effects. For example, the Aframax market saw freight rates for Russian ESPO rise to $3.5M, doubling in just a short period. The Aframax market is expected to continue tightening, particularly in light of the sanctions and the rerouting of Russian crude.

The Suezmax market, meanwhile, is seeing a surge in demand, especially on routes like West Africa to China, where rates have risen dramatically. This follows the same dynamics that reshaped the Suezmax market in 2019, as charterers look for alternatives to VLCCs as they face ongoing disruptions in larger vessel availability.

1 Year T/C - SUEZMAX AFRAMAX ECO / SCRUBBER

🌍 Geopolitical Shifts and the Red Sea

The tanker market’s outlook is also being shaped by geopolitical dynamics, such as the ceasefire in Gaza and the resulting routing of vessels through the Red Sea. This shift in routing, which follows the cessation of hostilities, could make Suezmax vessels more attractive, increasing tonne-miles and raising freight rates. However, questions remain as to whether owners and charterers are willing to take the risk in this area, given the volatile political environment in the region.

At the same time, the shadow fleet continues to play a significant role in the tanker market. As more vessels are pushed into this category due to sanctions, the fleet supply in the non-sanctioned market is tightening even further, driving up rates across the board.

🚢 The Effect of US Tariffs on Mexico and Canada

The potential imposition of tariffs by the US on Canada and Mexico is adding another layer of complexity to the market. Should tariffs be enforced, particularly on Mexican fuel oil exports, US refiners could face higher costs, which might force them to adjust their supply chains. As a result, Mexican fuel oil exports could be redirected to alternative markets, including Asia and the Caribbean, leading to further shifts in global tanker demand.

Additionally, Canada and Mexico could experience changes in their respective oil export strategies, with possible ripple effects across the Americas and beyond. These developments will continue to impact US imports, particularly as the US energy landscape adapts to these shifts in trade relations.

🌍 China’s Energy Strategy and the Role of Greek Tankers

China’s energy security strategy is another factor to watch. As Chinese refiners, particularly state-owned giants like Cnooc and Rongsheng, secure crude from diverse regions, this will likely further concentrate market share among these companies, leaving smaller refiners struggling to adapt to the new realities of the market. This shift will only intensify the demand for tankers, particularly from regions like Russia and Latin America, driving rate fluctuations in key trade routes.

Meanwhile, Greek tanker operators remain prominent players in the market. They continue to serve Russian residual fuel oil exports and may increase their involvement if freight rates continue to rise. These operators have been pivotal in shipping Russian oil through non-traditional routes, with some focusing on smaller vessel classes as sanctions continue to impact the larger tonnage.

🚨 Looking Ahead: Volatility and Opportunities

The tanker market’s outlook for 2025 is marked by a mix of uncertainty and opportunity. Sanctions, supply disruptions, and the tightening of fleet availability will continue to influence rates, with VLCC, Suezmax, and Aframax markets all feeling the effects.

As we move through the year, geopolitical tensions, tariffs, and trade shifts will keep the market volatile, but also provide opportunities for those able to navigate the landscape effectively. With spot rates pushing towards $50,000/day and beyond, it’s clear that the tanker market remains a high-stakes environment that will require close monitoring throughout 2025.

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$FRO (-5.69%)

$NAT (-3.99%)

$TRMD A (-8.83%)

$STNG (-9.65%)

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$HAFNI (-4.46%)

$DHT (-4.59%)

$TNK (-5.01%)

$ASC (-7.94%)

$INSW (-7.86%)

The tanker market is experiencing a dynamic surge, with VLCC rates jumping by as much as 39% since Friday, pushing the TD3C route from the Middle East to China to $37,800/day. This sharp rise follows the latest U.S. sanctions package, which has targeted 35% of shadow fleet vessels involved in Russian, Venezuelan, and Iranian oil shipments. As these vessels are increasingly sidelined, there’s a scramble to secure the remaining non-sanctioned tankers, pushing rates even higher.

1 Year T/C Crude

As Chinese and Indian refiners struggle to adjust, looking for alternative supplies, we’re seeing major shifts in the trade flow.

Unipec, for example, has chartered eight VLCCs, shifting its focus to crudes from Norway, Africa, and Brazil. At the same time, Middle Eastern benchmarks like Oman crude have seen premiums surge to year-highs of $4/barrel, reflecting a tightening market.

Additionally, Aframax freight for Russian ESPO blend crude has doubled to $3.5M, and the Shandong Port situation, with tankers stranded, is adding further pressure.

1 Year T/C VLCC- ECO / SCRUBBER

💡 Sanctions, Tight Fleet Supply & Shadow Fleet Dynamics

The sanction enforcement is forcing vessels into the shadow fleet, drastically tightening supply in the non-sanctioned market. In the past week alone, Middle East to China route rates jumped 77%, and 115% month-on-month as charterers rushed to secure unsanctioned vessels. This disruption is causing ripple effects throughout the market.

DHT Holdings, a New York-listed VLCC specialist, is one of the direct beneficiaries of this surge. The company reported its 2024 time-charter equivalent (TCE) earnings at $45,200/day, with its spot vessels earning slightly higher at $47,200/day. This solid performance is a result of DHT’s eco-designed and scrubber-fitted fleet, positioning them to take full advantage of the tightening market.

So far in 2025, DHT has been booking its ships at $43,586/day, including the DHT Jaguar on a Middle East to Singapore route, further solidifying its advantage in this market.

🛢 Suezmax and Aframax Markets Gaining Ground

While the VLCC market leads the charge, other segments are seeing their share of the action.

The Suezmax market, especially, is benefiting from the ripple effects of the VLCC surge. In 2019, the Suezmax market was essentially reshaped by the VLCC rate spike, and we’re witnessing similar dynamics unfold today. As VLCC rates climb, charterers are increasingly turning to Suezmax vessels, particularly for routes like West Africa to China, where they’re seeing rates soar. Analysts anticipate this market will continue to tighten, especially if sanctions and regional restrictions push more cargo to Suezmaxes.

Meanwhile, the Aframax market has also tightened as Russian oil continues to be moved across non-traditional routes. The Aframax sector is seeing higher rates, particularly in the U.S. Gulf and Russian crude markets, driven by sanctions and cargo rerouting.

For example, Aframax freight for Russian ESPO has surged to new heights, doubling to $3.5M. The Aframax market has seen limited activity due to inactivity early in 2025, but this is expected to turn around with growing demand.

1 Year T/C SUEZMAX - ECO / SCRUBBER

1 Year T/C AFRAMAX - ECO / SCRUBBER

💼 China’s Energy Security Push

In response to the tightening market, China’s mega refiners, such as Cnooc and Rongsheng, are securing crude from diverse regions to stabilize the domestic fuel supply.

These refiners are stepping in as smaller refiners struggle to adapt to the new reality of higher freight rates and restricted vessel availability. This shift is likely to further consolidate market share among China’s state-owned giants, with strategic investments helping secure energy security for the nation. As China continues to pivot toward alternative oil sources, the tanker market could experience further shifts, potentially leading to more spot market volatility.

🚨 What’s Next for the Tanker Market?

As we look to 2025, the outlook for the tanker market remains heated.

The combination of sanctions, tight fleet supply, and geopolitical uncertainty could further fuel rate surges. We’re already seeing how Atlantic crude flows are being impacted, with Middle Eastern exports facing increased demand.

Additionally, OPEC+ adjustments to supply could lead to more volatility, with rates possibly pushing towards $50,000/day in the near term.

The Suezmax and Aframax markets will continue to feel the effects of VLCC disruptions, with charterers shifting towards these vessels as the demand for oil shifts across regions. The rise of the shadow fleet and non-sanctioned vessels will continue to reshape tanker trade routes, bringing both opportunities and risks to owners and charterers alike.

As sanctions continue to shift the landscape, and fleet availability continues to tighten, we’re in for a volatile yet potentially profitable year in the tanker market.

💬 Let’s Connect!

Share your thoughts in the comments, and don’t forget to like and share this post! 🚢

$FRO (-5.69%)
$NAT (-3.99%)
$TRMD A (-8.83%)
$STNG (-9.65%)
$OET (-4.5%)
$HAFNI (-4.46%)
$DHT (-4.59%)
$TNK (-5.01%)
$ASC (-7.94%)
$INSW (-7.86%)