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.
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