Mid-May 2025 finds the tanker market battling turbulent seas. Very Large Crude Carriers (VLCCs) soften after a bank holiday slowdown, Suezmax grapples with Atlantic oversupply, Aframax maintains resilience, and Clean markets show mixed fortunes with LR2/LR1 weakening and MR stabilizing. U.S. sanctions on Iranian oil, a Houthi ceasefire, and OPEC+ production hikes shape the horizon, while Russian-Chinese crude blends and U.S.-India flows offer opportunities. This sector is a tanker weathering global storms—let’s chart its course.

⏬ VLCC Market: Softening Under Pressure

Rate Declines

VLCCs, the behemoths of crude transport, face a softening market after a brief rally. The Baltic Exchange’s TD3C (270,000 mt Middle East Gulf-to-China) rate drops 6.5 points to WS59.55, yielding a round-trip time-charter equivalent (TCE) of $41,547 per day, down $8,000 from last week. West Africa-to-China (TD15) falls 4 points to WS61.69 ($44,561 per day), and U.S. Gulf-to-China (TD22) declines $186,533 to $8.66 million ($48,578 per day). Clarksons’ fleet-weighted average dips to $50,583 per day, cooling from mid-April’s $59,700 peak. A bank holiday and quiet Middle East Gulf (MEG) fixtures push TD3C to the low WS60s, with charterers leveraging a growing tonnage list—VLCCs navigate a cautious descent.

Cargo Dynamics

China’s crude imports (11 million bpd in April) sustain VLCC demand, driven by Iranian (1.71 million bpd) and Russian cargoes, but new U.S. sanctions target four VLCCs delivering Iranian oil to China, risking disruptions. Two VLCCs (310,000-dwt and 303,100-dwt) discharge Russian-Chinese crude blends in Venezuela, spoofing AIS to mask destinations. U.S. crude flows to India surge to 470,000 bpd in June, the highest since August 2023, fueled by WTI discounts and tariff delays. OPEC+’s June production hike (411,000 bpd, led by Saudi Arabia) adds four to five VLCCs, but third-decade MEG fixtures remain slow (8 million barrels covered)—VLCCs balance opportunity with sanctions risks.

Global Forces

U.S.-China trade talks (May 11) and potential tariff exemptions (e.g., for energy) create uncertainty, with VLCC asset values holding firm (five-year-old 320,000-dwt at $109.21 million). A Houthi ceasefire may reopen the Red Sea, reducing tonne-miles but boosting short-haul volumes. UK sanctions target 100 shadow fleet tankers (worth $24 billion in 2024), impacting Russian crude flows. Red Sea rerouting persists, supporting TCEs, but low fleet growth (2.4% in 2026) and OPEC+ hikes signal upside. Clarksons notes rising inventories could lift rates in a contango market—VLCCs sail with guarded optimism.

For illustrative purposes only

⏳ Suezmax Market: Atlantic Oversupply

Rate Weakness

Suezmax vessels, vital for West African and Black Sea crude, face mounting pressure. The Baltic’s TD20 (130,000 mt Nigeria-to-UK Continent) drops nearly 10 points to WS89.44, yielding a TCE of $37,051 per day. Guyana-to-UK Continent (TD27) falls 13 points to WS88.33 ($36,042 per day), and CPC-to-Augusta (TD6) collapses 21 points to WS109.15 ($44,500 per day) as CPC charterers use owned tonnage. Middle East-to-Mediterranean (TD23) slips to just below WS90. Rates hit $58,821 per day in April but soften to $52,954 by May 5, with U.S. Gulf replacements at WS85 signaling further declines—Suezmax struggles in an oversupplied Atlantic.

Regional Trends

West Africa sees weak enquiry, with 20+ Suezmax vessels available and 15 options within a five-day window, pushing TD20 toward WS90. U.S. Gulf softness (replacements at 145x85) and transatlantic activity (six options absorbed) limit upside. Black Sea TD6 weakens as CPC demand drops, with only eight third-decade stems remaining. China’s Kazakhstan CPC crude imports (240,000 bpd) and Norway’s Johan Castberg field (135,000 bpd) support rates, but West African barrel sales lag, requiring prompt fixtures. East of Suez markets appear overtonnaged, with ballasters heading to the Cape of Good Hope despite TD20’s decline—Suezmax seeks new demand sources.

External Pressures

U.S. port fees exempt sub-80,000 dwt Suezmax units, and energy tariff exemptions (except LNG) reduce disruptions, per Torm’s CEO. Houthi ceasefire talks could normalize Red Sea routes, offsetting tonne-mile gains with short-haul volumes. U.S. sanctions on Iranian oil and UK’s shadow fleet blacklist (400+ vessels) increase risks. Kazakhstan’s 1.7 million bpd output sustains CPC exports, but OPEC+ cuts (down 160,000 bpd in April) temper volumes. Clarksons forecasts 2.4% crude fleet growth in 2026, outpacing 0.5% demand, signaling rate pressure—Suezmax navigates a challenging outlook.

Trump announces the ceasefire during a meeting at the Oval office May 6, 2025

⏱️ Aframax Market: Resilient but Tested

Rate Stability

Aframax vessels, versatile crude carriers, hold steady amid softening trends. The Baltic’s TD7 (80,000 mt Cross-UK Continent) drops 7 points to WS125 ($39,100 per day, Hound Point-to-Wilhelmshaven). Cross-Mediterranean (TD19) falls 20 points to WS155 ($43,500 per day, Ceyhan-to-Lavera). Atlantic routes weaken, with East Coast Mexico/U.S. Gulf (TD26) and Covenas/U.S. Gulf (TD9) tumbling 28 points to WS140 ($29,100 and $28,800 per day). U.S. Gulf-to-UK Continent (TD25) remains at WS149-150 ($36,300 per day). Rates hit $51,450 per day in April but fall to $40,260 by May 5, yet strategic repositioning sustains resilience—Aframax balances stability with pressure.

Market Dynamics

North Sea rates weaken with growing tonnage lists, though second-decade stems offer activity. Mediterranean markets soften as Libyan and Ceyhan dates advance, with prompt tonnage oversupply. U.S. Gulf sees Aframax rates drop to 145x72.5, with no Suezmax spillover and weak Nigerian crude sales. Two Aframax vessels face U.S. sanctions for Iranian oil transfers, risking availability. Norway’s Johan Castberg (135,000 bpd) and Kazakhstan’s CPC crude support rates, but Atlantic oversupply caps gains. Signal Group’s repositioning to U.S. Gulf/Central Europe achieves $60,700 per day for May (27% fixed)—Aframax holds firm, eyeing new cargoes.

Broader Forces

U.S. port fee exemptions benefit sub-80,000 dwt Aframax vessels, and tariff exemptions for energy minimize disruptions. Houthi ceasefire talks may reduce Red Sea rerouting, but short-haul volumes could offset losses. U.S. and UK sanctions (e.g., 100 shadow fleet tankers) deter operators, while Red Sea disruptions boost tonne-miles. Clarksons’ 2026 forecast (2.4% crude fleet growth, 0.5% demand) signals rate pressure, but Johan Castberg’s 220,000 bpd by Q2 and U.S.-India crude flows (470,000 bpd) offer upside—Aframax navigates with cautious confidence.

Britain Friday sanctioned 100 Russian shadow fleet oil tankers oil tankers that carried more than $24 billion in cargo since the beginning of 2024.

⏸️ Clean Market: Mixed Performance

Rate Divergence

Clean tanker markets reflect regional splits. LR2 rates weaken, with TC1 (75kt MEG/Japan) dipping from WS123.33 to WS110.56 and TC20 (90kt MEG/UK-Continent) losing $231,250 to $3.25 million. LR1 rates stabilize, with TC5 (55kt MEG/Japan) holding at low WS130s and TC8 (65kt MEG/UK-Continent) at $2.7 million, but UK-Continent TC16 (60kt ARA/West Africa) falls 7.5 points to WS120. MR rates soften slightly, with TC17 (35kt MEG/East Africa) at WS210, TC2 (37kt ARA/U.S. Atlantic) down 6.88 points to WS126.56 ($12,044 per day), and TC19 (37kt ARA/West Africa) at WS146.88. Handymax weakens, with TC6 (30kt Cross-Mediterranean) at WS130.28 and TC23 (30kt Cross-UK-Continent) down 13.61 points to WS133.33—Clean markets navigate uneven currents.

Trade Patterns

MEG LR2/LR1 markets soften due to weak enquiry, though Asian tonnage lists tighten. UK-Continent LR1s and MRs face cancellations, lengthening tonnage lists. U.S. Gulf MRs stabilize with late-week demand, but TC14 (38kt/UK-Continent) falls to WS111.07 and TC21 (38kt/Caribbean) drops to $535,714. A 50,000-dwt MR delivers Qatar’s GTL diesel (35,000 tonnes) to the U.S. Gulf, capitalizing on tightening diesel inventories (down 2.4 million barrels). Refinery margins climb post-OPEC+ news, supporting cargo flows after maintenance. Mediterranean and U.S. Gulf MR markets benefit from repositioning, but Handymax lags—Clean tankers seek balance.

Influencing Factors

U.S. port fees minimally impact MR/Handymax (sub-55,000 dwt), and Torm notes no tariff disruptions for clean products (energy exempt). Houthi ceasefire talks could normalize Red Sea routes, but Torm’s CEO sees neutral rate impacts due to short-haul volume growth. Clarksons forecasts 6.3% clean fleet growth in 2026 with flat demand, pressuring rates. Rising refinery margins and U.S. diesel demand boost MR, while Qatar’s GTL trade signals arbitrage. U.S. sanctions on Iranian oil and Chinese terminals risk disruptions—Clean markets balance opportunity with oversupply risks.

For illustrative purposes only

🌐 What’s Moving It: Oil Flows and Sanctions

Commodity Shifts

U.S. crude to India (470,000 bpd in June) and China’s 11 million bpd imports drive VLCC demand, though Iranian sanctions disrupt flows. Russian-Chinese crude blends to Venezuela (1.2 million barrels) and Kazakhstan’s CPC crude (240,000 bpd) support Suezmax/Aframax. Norway’s Johan Castberg (135,000 bpd) adds cargoes, while OPEC+’s June hike (411,000 bpd) lifts crude sentiment. Clean markets benefit from Qatar’s GTL diesel and rising refinery margins post-maintenance, supporting MR. Falling crude prices and tightening U.S. diesel inventories fuel clean trades—oil flows shape tanker dynamics.

Policy Pressures

U.S. sanctions target six tankers (four VLCCs, two Aframax) and Chinese terminals for Iranian oil, risking VLCC/Aframax availability. UK’s shadow fleet sanctions (100 tankers, $24 billion) and Houthi ceasefire talks could normalize Red Sea routes, reducing tonne-miles but boosting short-haul volumes. U.S.-China trade talks (May 11) and energy tariff exemptions create uncertainty. Clarksons’ 2026 forecast (2.4% crude, 6.3% clean fleet growth) signals rate pressure, but OPEC+ hikes and new fields (e.g., Johan Castberg) offer upside—sanctions and trade policies steer the tanker path.

🌐 Market and Stocks: Navigating Volatility

Stock Performance

Tanker stocks reflect resilience. International Seaways $INSW (+1,71 %) reports $40 million adjusted net income ($0.80 per share), beating estimates, with VLCCs at $42,800 per day (Q2 guidance). DHT Holdings $DHT (+0,65 %) achieves $48,700 per day spot rates (72% booked), up 34% from Q1, with $0.15 per share dividend. BP $BP. (+0,59 %) sells six 46,000-dwt MRs for $192 million, possibly to Tsakos Group $TNP (+1,11 %) (nine Suezmax newbuildings, $1.34 billion). Scorpio Tankers $STNG (+0,11 %) and Hafnia $HAFNI (+3,81 %) are Fearnley’s top picks for MR/LR2 strength. Clarksons notes tanker earnings at $35,000 per day (45% above 10-year average)—stocks balance geopolitical risks with demand growth.

Investor Insights

VLCCs may rebound with OPEC+ hikes and rising inventories, but sanctions pose risks. Suezmax and Aframax rely on Kazakhstan and Norwegian crude, though Atlantic oversupply caps gains. Clean markets face 2026 headwinds (6.3% fleet growth), but MR benefits from U.S. diesel demand and GTL trades. Seaways’ $INSW (+1,71 %) VLCC buyback ($250 million refinancing) and Torm’s $TRMD A (+1,64 %) neutral Red Sea outlook signal confidence. Low crude fleet growth (2.4%) and sanctions risks shape strategies—investors weigh trade disruptions against supply constraints.

Sector Outlook

Sanctions, Houthi ceasefire talks, and Red Sea dynamics pressure rates, but OPEC+ hikes and new fields drive demand. Clarksons’ 2026 forecast (crude steady, clean easing) highlights clean oversupply risks. MR and Handymax benefit from clean fuel trades, while Suezmax and Aframax rely on CPC and Johan Castberg flows. Stocks like Seaways $INSW (+1,71 %) (strong liquidity, $673 million) and DHT $DHT (+0,65 %) (undervalued) offer value if demand holds—investors balance short-term volatility with long-term fundamentals.

🌐 Outlook: Charting Future Waves

Market Projections

VLCC ranges $41,000-$50,000 per day—OPEC+ hikes offer upside—cautious. Suezmax at $36,000-$44,500—Atlantic weakness persists—challenged. Aframax at $29,000-$43,500—resilience holds, but oversupply looms—steady. Clean varies: LR2/LR1 at $23,400-$28,800 (softening), MR at $12,000-$20,900 (stabilizing), Handymax at $10,000-$13,000 (pressured)—mixed. Red Sea normalization and sanctions signal volatility—2026 could soften with fleet growth.

Strategic Horizons

VLCCs leverage OPEC+ and U.S.-India flows, but Suezmax needs Atlantic demand. Aframax’s repositioning ensures stability, while MR capitalizes on clean fuel arbitrage. Handymax risks stagnation without new cargoes. Sanctions, 2026 fleet growth (6.3% clean), and trade talks challenge margins, but low crude fleet growth (2.4%) and new fields offer upside. Investors must navigate sanctions and geopolitical shifts while betting on supply constraints—strategic moves will define tanker fortunes.

Your Call

Will VLCCs rebound with OPEC+ hikes, or can MR’s clean fuel trades lead the way? Share your take—let’s conquer the markets! 🚢

1 Year T/C - VLCC SUEZMAX AFRAMAX ECO / SCRUBBER - May 7th

$NAT (+1,23 %)

$FRO (+1,18 %)

$TRMD A (+1,64 %)

$STNG (+0,11 %)

$OET (+5,14 %)

$HAFNI (+3,81 %)

$DHT (+0,65 %)

$TNK (+1,95 %)

$ASC (+1,58 %)

$INSW (+1,71 %)

*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.

Early May 2025 sees the tanker market at a crossroads. Very Large Crude Carriers (VLCCs) capitalize on China’s strategic oil stockpiling, Suezmax softens amid West African demand dips, Aframax maintains resilience, and Clean markets show mixed fortunes with LR2/LR1 weakening and MR recovering. U.S. tariffs, Houthi sanctions, and Kazakhstan’s crude surge shape the horizon, while new Norwegian fields and rerouted clean fuels offer opportunities. This sector is a tanker navigating global currents—let’s explore its journey.

⏬ VLCC Market: Buoyant on Chinese Demand

Rate Fluctuations

VLCCs, the giants of crude transport, ride a wave of Chinese demand but face tariff headwinds. The Baltic Exchange’s TD3C (270,000 mt Middle East Gulf-to-China) rate drops 5.5 points to WS67, yielding a round-trip time-charter equivalent (TCE) of $51,134 per day. West Africa-to-China (TD15) eases 2.5 points to WS67.13 ($51,690 per day), while U.S. Gulf-to-China (TD22) rises by $411,358, achieving a TCE of $51,054 per day. Clarksons’ fleet-weighted average hits $59,700 per day, up 9% week-on-week, despite a quiet Middle East Gulf (MEG) market post-rally (mid WS70s for MEG/East). Charterers hold back on second-decade MEG fixtures, creating uncertainty—VLCCs remain robust but cautious.

Cargo Dynamics

China’s crude imports surge to 11 million barrels per day in April, the highest since August 2023, driven by strategic stockpiling amid low crude stockpiles (six-year low) and easing Brent prices ($70 in early March). Imports from Iran (1.71 million bpd) and Russia rise, though U.S. crude faces tariff risks (125% on WTI Midland). Two VLCCs (319,000-dwt each) divert from China to Singapore and Malaysia, while a 319,000-dwt vessel discharges 1.99 million barrels in Ningbo, possibly under tariff exemptions. Middle East and West African cargoes slow for third-decade fixtures (8 million barrels covered), but OPEC’s May production boost supports sentiment. Venezuela’s “zombie” VLCCs (e.g., 320,000-dwt ship spoofing as a scrapped vessel) add risk—China’s demand drives VLCC strength, tempered by trade uncertainties.

Global Forces

U.S.-China tariffs (affecting 0.4% of seaborne oil trade) and potential exemptions (e.g., for crude) create volatility, with five VLCCs fixed for May U.S.-China voyages at risk of diversion. Houthi sanctions blacklist vessels delivering to Yemen’s Ras Isa port, impacting VLCC counts. Red Sea rerouting via the Cape of Good Hope persists, boosting tonne-miles. China’s refinery maintenance (April-May) typically curbs demand, but strategic buying defies trends. Low fleet growth (2.4% in 2026) and OPEC’s potential June output hike signal upside, though trade tensions and sanctions cloud the outlook—VLCCs sail with guarded optimism.

For illustrative purposes

⏳ Suezmax Market: Atlantic Softness

Rate Declines

Suezmax vessels, key for West African and Black Sea crude, face softening rates. The Baltic’s TD20 (130,000 mt Nigeria-to-UK Continent) falls 10 points to WS109.17, yielding a TCE of $50,178 per day. Guyana-to-UK Continent (TD27) drops 9 points to WS107.5 ($48,939 per day), while CPC-to-Augusta (TD6) loses 4 points to WS131.55 ($63,500 per day). Middle East-to-Mediterranean (TD23) holds steady at WS91. Rates hit a 2025 high of $56,540 per day in early April, but West African demand tails off, eroding gains—Suezmax navigates a challenging Atlantic market.

Regional Trends

West Africa sees reduced enquiry, with only 20 suitable Suezmax vessels available for third-decade fixtures, signaling further softening below WS110. U.S. Gulf crude struggles eastbound, boosting transatlantic activity (WS95), but local tonnage erodes. China’s resumption of Kazakhstan CPC crude imports (240,000 bpd in April) via Novorossiysk supports TD6 stability, with nine cargoes fixed for May-June. Norwegian Johan Castberg field (135,000 bpd in May) adds demand, with a 158,000-dwt vessel loading 700,000-barrel stems. Black Sea and Mediterranean markets benefit from CPC flows, but Atlantic oversupply persists—Suezmax relies on new trade lanes.

External Pressures

U.S. port fees exempt sub-80,000 dwt vessels, sparing smaller Suezmax units, but tariffs on Venezuelan oil and Houthi sanctions increase risks. Red Sea disruptions extend voyage times, supporting TCEs. Kazakhstan’s 1.7 million bpd output sustains CPC exports, though OPEC+ cuts (down 160,000 bpd in April) temper volumes. China’s property crisis and renewable energy push may curb oil demand, per Clarksons, but Johan Castberg’s light crude offers European refiners an alternative. Low fleet growth (2.4% in 2026) and geopolitical risks (e.g., Russia-Ukraine ceasefire) shape prospects—Suezmax seeks balance amid Atlantic weakness.

For illustrative purposes

⏱️ Aframax Market: Resilient Amid Pressure

Rate Stability

Aframax vessels, versatile crude carriers, hold steady despite softening trends. The Baltic’s TD7 (80,000 mt Cross-UK Continent) slips 4 points to WS135 ($49,100 per day, Hound Point-to-Wilhelmshaven). Cross-Mediterranean (TD19) drops 4 points to WS176.61 ($54,700 per day, Ceyhan-to-Lavera). Atlantic routes weaken, with East Coast Mexico/U.S. Gulf (TD26) and Covenas/U.S. Gulf (TD9) falling 10 points to WS178-177 ($46,500 and $43,800 per day). U.S. Gulf-to-UK Continent (TD25) slides 3.5 points to WS170 ($44,517 per day). Signal Group’s pool reports $60,700 per day for May (27% fixed), reflecting strategic repositioning—Aframax remains resilient but faces downward pressure.

Market Dynamics

North Sea rates stabilize despite limited activity, with second-decade stems busier but growing tonnage lists threatening softness. Mediterranean markets soften as Libyan and Ceyhan dates advance, with North Sea competition adding pressure. U.S. Gulf sees no Aframax spillover from Suezmax, and Nigerian crude struggles limit enquiry. Signal Group’s repositioning to U.S. Gulf and Central Europe (from U.S. West Coast and Lithuania) captures market strength, achieving $43,600 per day in April (98% fixed). Kazakhstan CPC crude and Johan Castberg cargoes support rates, but Mediterranean tonnage balance weakens—Aframax holds firm, eyeing new opportunities.

Broader Forces

U.S. port fee exemptions benefit sub-80,000 dwt Aframax vessels, and Scorpio Tankers notes minimal impact from China-targeted fees due to fleet structure (South Korean-built, sub-55,000 dwt). Houthi sanctions and Venezuelan tariff risks deter operators, while Red Sea rerouting boosts tonne-miles. Clarksons forecasts 2.4% crude fleet growth in 2026, outpacing 0.5% demand, signaling rate pressure. Kazakhstan’s CPC surge and Norway’s Johan Castberg (220,000 bpd by Q2) provide upside, but trade tensions and oversupply loom—Aframax navigates with cautious confidence.

An F/A-18E Super Hornet prepares to launch off the USS Harry S. Truman - For illustrative purposes

⏸️ Clean Market: Mixed Fortunes

Rate Divergence

Clean tanker markets show varied performance. LR2 rates dip, with TC1 (75kt MEG/Japan) falling 2 points to WS124.44 and TC20 (90kt MEG/UK-Continent) dropping $85,000 to $3.5 million. LR1 rates sink further, with TC5 (55kt MEG/Japan) losing 13 points to WS134.06 and TC8 (65kt MEG/UK-Continent) falling to $2.714 million. MR markets recover, with TC17 (35kt MEG/East Africa) up 2 points to WS213.21 ($21,800 per day) and U.S. Gulf TC14 (38kt/UK-Continent) gaining 13 points to WS122.5. Handymax struggles, with TC6 (Baltic) dropping 32.5 points to WS136.94 and TC23 (30kt Cross-UK-Continent) falling 20 points to WS151.67—Clean markets reflect regional splits.

Trade Patterns

MEG LR2/LR1 rates weaken as demand softens, while UK-Continent LR1s hold at WS130 ($24,000 per day). MR markets rebound, driven by U.S. Gulf strength (TC18 up 9 points to WS166.79) and Caribbean runs (TC21 up $77,000 to $589,286). Handymax faces pressure from oversupply and weak Baltic/UK-Continent demand. A 50,000-dwt MR delivers 35,000 tonnes of Qatar’s GTL diesel to the U.S. Gulf, capitalizing on tightening diesel inventories (down 2.4 million barrels). Mediterranean and U.S. Gulf MR markets benefit from repositioning, but Handymax lags—Clean tankers navigate a fragmented landscape.

Influencing Factors

U.S. port fees minimally impact MR and Handymax (sub-55,000 dwt), but LR2 faces risks, though Scorpio notes limited U.S. exposure. Red Sea disruptions support clean tonne-miles, but Clarksons forecasts 6.3% clean fleet growth in 2026 with flat demand, pressuring rates. Qatar’s GTL shipment signals new arbitrage, while China’s potential tariff exemptions (e.g., for chemicals) could boost clean trades. Houthi sanctions and Venezuelan risks deter operators, but U.S. diesel demand offers MR upside—Clean markets balance opportunity with oversupply risks.

The Torm Belis - For illustrative purposes

🌐 What’s Moving It: Oil Flows and Trade Policies

Commodity Shifts

China’s 11 million bpd crude imports (April) drive VLCC demand, fueled by Iranian (1.71 million bpd) and Russian cargoes, though U.S. crude faces tariff hurdles. Kazakhstan’s CPC crude (240,000 bpd) and Norway’s Johan Castberg (135,000 bpd) boost Suezmax and Aframax. Venezuelan “zombie” tankers (e.g., spoofing scrapped VLCCs) sustain illicit flows. Clean markets see GTL diesel from Qatar to the U.S. (35,000 tonnes) and tightening U.S. diesel inventories, supporting MR. OPEC’s May output hike and potential June increase lift crude sentiment, but China’s refinery maintenance curbs upside—oil flows shape tanker dynamics.

Trade and Policy Pressures

U.S.-China tariffs (0.4% of oil trade) and potential exemptions (e.g., for crude, chemicals) create uncertainty, diverting VLCCs to Singapore/Malaysia. Houthi sanctions blacklist vessels at Yemen’s Ras Isa, impacting crude and clean trades. U.S. port fees exempt sub-55,000 dwt tankers, sparing MR/Handymax, but Venezuelan tariffs and Red Sea rerouting increase costs. Geopolitical risks (e.g., Russia-Ukraine ceasefire, Trump’s policies) and Clarksons’ 2026 forecast (2.4% crude, 6.3% clean fleet growth) signal rate pressure. Kazakhstan’s CPC surge and Qatar’s GTL trade offer opportunities—trade policies steer the tanker path.

🌐 Market and Stocks: Balancing Volatility

Stock Performance

Tanker stocks navigate trade uncertainties. Scorpio Tankers $STNG (+0,11 %) reports strong Q1 earnings, beating expectations, with a $397 million cash balance and 10% loan-to-value ratio. Its MR/Handymax fleet (sub-55,000 dwt) avoids U.S. port fee impacts, and LR2s face minimal U.S. exposure. BP $BP. (+0,59 %) sells six 46,000-dwt MRs for $192 million ($32 million each), possibly to Tsakos Group $TNP (+1,11 %) , which secures nine Suezmax newbuildings ($1.34 billion). Scorpio’s 115,000-dwt LR2 earns $32,000 per day (two-year charter), and its 38,700-dwt Handysize fetches $24,000 per day. Clarksons notes tanker earnings at $35,000 per day (45% above 10-year average)—stocks reflect resilience amid risks.

Investor Insights

VLCC rates may soften if MEG fixtures remain quiet, but China’s stockpiling and OPEC output support sentiment. Suezmax and Aframax benefit from Kazakhstan and Norwegian crude, though Atlantic oversupply caps gains. Clean markets face 2026 headwinds (6.3% fleet growth), but MR strength (e.g., U.S. diesel demand) offers upside. Scorpio’s conservative capital allocation (minimal buybacks, $339 million in 2024) reflects geopolitical caution, while Tsakos’ fleet expansion signals long-term optimism. Low crude fleet growth (2.4%) and sanctions risks shape strategies—investors weigh trade volatility against supply constraints.

Sector Outlook

U.S. tariffs, Houthi sanctions, and Red Sea rerouting pressure rates, but China’s crude imports and new fields (e.g., Johan Castberg) drive demand. Clarksons’ 2026 forecast (crude earnings steady, clean easing) highlights oversupply risks, particularly for LR2/LR1. MR and Handymax benefit from U.S. diesel and GTL trades, while Suezmax and Aframax rely on CPC and Norwegian flows. Stocks like Scorpio (trading below net asset value) and Tsakos (expanding fleet) offer value if demand holds—investors balance short-term risks with long-term fundamentals.

🌐 Outlook: Charting Future Currents

Market Projections

VLCC ranges $50,000-$60,000 per day—China’s demand sustains strength—buoyant. Suezmax at $48,000-$63,000—Atlantic softness limits upside—cautious. Aframax at $43,000-$54,000—resilience persists, but oversupply looms—steady. Clean varies: LR2/LR1 at $15,000-$24,000 (weakening), MR at $15,000-$22,000 (recovering), Handymax at $10,000-$15,000 (pressured)—mixed. Red Sea rerouting and new trades signal volatility—2026 could soften if fleet growth outpaces demand.

Strategic Horizons

VLCCs thrive on Chinese and OPEC flows, but Suezmax needs stronger Atlantic demand. Aframax’s repositioning (e.g., Signal’s U.S. Gulf focus) ensures stability, while MR capitalizes on clean fuel arbitrage. Handymax risks stagnation without new cargoes. Tariffs, sanctions, and 2026 fleet growth (6.3% clean) challenge margins, but low crude fleet growth (2.4%) and new fields offer upside. Investors must navigate geopolitical uncertainties while betting on supply constraints—strategic moves will define tanker fortunes.

Your Call

Will VLCCs lead with Chinese demand, or can MR’s clean fuel surge steal the spotlight? Share your take—let’s master the markets! 🚢

1 Year T/C - VLCC SUEZMAX AFRAMAX ECO / SCRUBBER - April 30th

$NAT (+1,23 %)

$FRO (+1,18 %)

$TRMD A (+1,64 %)

$STNG (+0,11 %)

$OET (+5,14 %)

$HAFNI (+3,81 %)

$DHT (+0,65 %)

$TNK (+1,95 %)

$ASC (+1,58 %)

$INSW (+1,71 %)

*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.

Mid-April 2025 finds the tanker market navigating turbulent waters. VLCCs grapple with softer forecasts amid trade wars, Suezmax and Aframax ride high on Atlantic scarcity, and clean tankers seize new routes from Argentina to Mexico. Sanctions choke Venezuelan flows, U.S. port fees loom, and shadow fleets bend under pressure. This is a sector steering through chaos with resilience—let’s dive into its journey.

⏬ VLCC Market: Holding the Line

Earnings Snapshot

The VLCC fleet, crude’s colossal carriers, faces headwinds as global demand forecasts falter. Baltic Exchange spot rates from Middle East-to-Asia hover at $36,500 per day, with Clarksons Securities slashing 2025-2026 projections to $50,000 per day (down from $70,000), citing trade war impacts. Eco-ships are projected to earn $53,000 daily, older units $46,000. DHT Holdings $DHT (+0,65 %) reports Q2 spot bookings at $48,700 per day (56% covered) and time-charter earnings at $45,100. A seven-year charter for DHT Appaloosa at $41,000 daily (plus profit-sharing) signals long-term faith, though tariff jitters keep sentiment cautious.

Supply and Demand Shifts

OPEC+’s output hike and Venezuela’s halted U.S. exports reshape flows. Venezuela’s 250,000 barrels per day to China (four VLCCs monthly) may lean on shadow fleets or transshipment hubs like Malaysia, per Braemar, limiting mainstream gains. However, Pakistan’s proposed 16 million barrel U.S. crude imports (eight VLCCs) and China’s 7.3 million barrel Canadian surge via Trans Mountain Pipeline offer long-haul promise. U.S. sanctions sideline Iranian shadow VLCCs (e.g., Bestla, Egret), potentially freeing 13 compliant ships for 500,000 barrels daily—Clarksons sees rates struggling below $45,000 without this shift.

Broader Impacts

The IEA’s 33% cut in 2025 oil demand growth (to 730,000 barrels per day) and OPEC’s 1.3 million barrel forecast dent confidence, with Brent crude at $61.57 per barrel pressuring shale output by 2026. U.S.-China tariffs (145% vs. 10% globally) and U.S. port fees ($18-$33 per net tonne by 2028) spark caution, though exemptions for ballast vessels ease fears. DHT’s sale of Chinese-built VLCCs Lotus and Peony for $103 million reflects strategic pivots—VLCCs hold steady, eyeing tighter fundamentals.

⏳ Suezmax Market: Atlantic Surge

Rate Climb

Suezmax tankers, mid-tier powerhouses, soar on Atlantic scarcity. Spot earnings top $50,000 per day, with Braemar noting firm markets as Venezuela’s export halt (200,000 barrels per day to the U.S.) floods the basin with available ships. Czechia’s shift to Transalpine Pipeline imports via Trieste (from Russian Druzhba) boosts Mediterranean demand for Norwegian and Azerbaijani crude. Rates for eco-Suezmax climb to $52,000 daily, up from $47,000 last week, driven by tight tonnage and rerouting.

Hot Zones

Venezuela’s suspension of Chevron’s $CVX (+0,19 %) cargoes (e.g., Dubai Attraction, Carina Voyager) leaves eight Aframaxes monthly seeking Atlantic trades, indirectly tightening Suezmax lists. Turkey’s Tupras resumes Russian Urals at $57 per barrel, with Kyklades’ Nissos Christiana delivering 730,000 barrels to Izmit. Pakistan’s potential U.S. crude imports (16 Suezmaxes equivalent) add upside. Mediterranean fixtures rise as Czechia’s 175,000 barrel-per-day refineries tap TAL—scarcity fuels this fiery ascent.

Trade Twists

U.S. sanctions on Iranian tankers (e.g., Reston, Nyantara) and Chinese refiners like Shandong Shengxing curb shadow fleet capacity, nudging mainstream demand. China’s pivot to Canadian crude (7.3 million barrels in March) stretches Pacific hauls, while Venezuela’s pivot to Asia via transshipment hubs like Singapore tests compliance. Tariff pauses (90 days for Pakistan) offer breathing room, but geopolitical heat keeps Suezmax on edge—resilient yet alert.

⏱️ Aframax Market: Atlantic Thunder

Rate Highlights

Aframax tankers, agile crude haulers, roar with spot earnings exceeding $50,000 per day. U.S. Gulf-to-UK Continent rates hit WS195, yielding $54,000 daily, while Mediterranean rates climb to WS180, netting $62,000. Venezuela’s export freeze floods the Atlantic with tonnage, yet redirected ships find work in Brazil-to-China ($18.74 per tonne) and Trieste-bound Czech flows. Baltic TCE rises to $50,500 per day (up $1,200 daily), with eco-Aframax at $53,000—Atlantic vigor prevails.

Tonnage Trends

Venezuela’s halt (six Aframaxes idled, including Pegasus Star, Ionic Anax) creates a surplus, but Braemar expects quick redeployment to non-sanctioned trades like Guyana-to-Europe. George Economou’s sale of eight Aframaxes (e.g., Monarch I, Saraswati) to Chinese buyers for Russian trades tightens compliant tonnage—six ships lift Urals from Primorsk in March. U.S. port fees exempt vessels under 55,000 dwt, sparing smaller Aframaxes—lists tighten as demand holds.

Sanctions Strain

Russian Urals at $57 per barrel (below G7’s $60 cap) draw Greek owners like Stealth Maritime (Suez Enchanted) to Primorsk, with G7-insured tankers up 36% in March. U.S. sanctions blacklist 140 shadow ships, squeezing Russia’s fleet—mainstream Aframaxes fill the gap, hauling to India and China. Czechia’s TAL shift and Tupras’ Russian pivot add cargoes—sanctions reshape routes, but Aframax thrives on Atlantic strength.

For illustrative purposes

⏸️ LR/MR/Handymax Market: New Horizons

Rate Rundown

Clean tankers sail divergent paths. LR2 MEG-to-Japan drops to WS125, netting $30,000 daily, while LR1 MEG-to-UK Continent falls to $2.9 million. MR Pacific rates slide to $19,500 per day (down 15%), but Atlantic MRs hold at $22,000. Torm’s $TRMD A (+1,64 %) MR Torm Singapore pioneers 300,000 barrels of ultra-low sulphur diesel from Mexico’s Dos Bocas refinery, and Tsakos’ $TNP (+1,11 %) LR1 Chantal and Selecao lift 1.47 million barrels of Argentine fuel oil to the U.S. Handymax Med TC6 jumps to WS195, yielding $25,000 daily—West shines, East fades.

Market Moods

New trades spark optimism. Argentina’s fuel oil exports hit 66,000 barrels per day in March (up from 7,000), driven by arbitrage to Houston and Honolulu. The UK-to-Colombia petrol route (Energy Ariadne, 41,000 tonnes) reopens after a year, fueled by Europe’s 350,000 barrel-per-day surplus. Mexico’s Olmeca refinery curbs U.S. clean imports, yet Dos Bocas exports lift MR demand. Eastern LR rates sag, but Western MRs and Handymax surge on tight supply—split seas define this market.

Outside Forces

U.S. port fees (71% of tanker orderbooks Chinese-built) prompt sales like DHT’s VLCCs, but exemptions for small vessels shield MRs. Tufton $SHPC Assets sees tankers benefiting from tariff-driven rerouting—South America’s petrol deficit and Europe’s surplus stretch tonne-miles. Sanctions on Iranian and Venezuelan flows push shadow trades to Asia, capping clean tanker gains—Western markets lead, buoyed by new routes.

The Petroleos Mexicanos Dos Bocas Refinery in Paraiso, Mexico - For illustrative purposes

🌐 What’s Moving It: Oil and Geopolitics

Oil and Supply

IEA’s 730,000 barrel-per-day demand growth (down 300,000) and OPEC’s 1.3 million forecast signal softer oil needs, with Brent at $61.57. Venezuela’s 680,000 barrel-per-day exports pivot to China (250,000 barrels), Pakistan eyes 16 million U.S. barrels, and Czechia’s TAL shift adds Mediterranean cargoes. Sanctions sideline shadow fleets (140 Russian, five Iranian tankers), lifting mainstream utilization—oil flows steer this market’s course.

Global Dynamics

U.S.-China tariffs (145%) and Venezuelan sanctions (25% on buyers) disrupt flows, though 90-day pauses offer relief. U.S. port fees ($18-$33 per net tonne) and Houthi strikes in Yemen add tension, but tankers outpace containers, per Tufton, via rerouting. George Economou’s ISAB refinery seeks new suppliers, signaling trade shifts—geopolitical storms test tanker resilience.

🌐 Market and Stocks: Value in the Vortex

Stock Swings

Tanker stocks rebound 13% week-on-week, per Clarksons, after a 13% tariff-driven drop. Frontline $FRO (+1,18 %) jumps 20% to $15.50, DHT $DHT (+0,65 %) rises to $10.71, but IEA’s demand cut trims gains—Frontline, DHT, and International Seaways $INSW (+1,71 %) dip 2%. Tufton’s $SHPC Q1 profit falls to $8 million (from $11.76 million), with a -10.4% NAV return as asset values slide. Clean tanker stocks like Scorpio $STNG (+0,11 %) (down 1%) and Torm $TRMD A (+1,64 %) (down 2%) hold firmer.

Investor Angles

Clarksons sees tanker equities at 73% of NAV for crude (58% for clean), implying VLCC rates below $40,000—undervalued with upside. Suezmax and Aframax earnings above $50,000 draw buyers, per Seaborne’s Eva Tzima, with IMS’ $26.3 million LR2 purchase signaling confidence. Tufton eyes rerouting benefits, while sanctions on shadow fleets could tighten markets—investors see value, but tariff risks linger.

Sector Outlook

Scaled-back port fees and tariff pauses lift sentiment, but Chinese tariffs threaten costs. Aging fleets (12% over 20 years) and low orderbooks (3% growth) hint at 2026 tightness. Stocks lag fundamentals, ripe for gains if trade stabilizes—tankers gleam as undervalued bets in the chaos.

For illustrative purposes

🌐 Outlook: Shifting Currents

Fluid Futures

VLCCs hover at $36,000-$50,000 daily—sanctions and new trades offer lift—steady. Suezmax at $50,000-$55,000—Atlantic scarcity powers on—robust. Aframax at $50,000-$62,000—Atlantic thunders—strong. Clean tankers split: LR at $25,000-$30,000, MR at $19,000-$22,000—West rises, East wanes—mixed. Rerouting and sanctions shape upside—2026 beckons if stability holds.

Your Call

Will Suezmax keep soaring, or clean tankers steal the show? Share your take—let’s chart the seas! 🚢

$NAT (+1,23 %)

$FRO (+1,18 %)

$TRMD A (+1,64 %)

$STNG (+0,11 %)

$OET (+5,14 %)

$HAFNI (+3,81 %)

$DHT (+0,65 %)

$TNK (+1,95 %)

$ASC (+1,58 %)

$INSW (+1,71 %)

*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.