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Geopolitical Tensions · Iran Risk · Oil Tanker Rates · VLCC Market
The cost to charter oil supertankers is projected to reach decade highs due to escalating geopolitical risks involving Iran and a concentrated market of vessel ownership.
Earnings for very-large crude carriers (VLCCs) on the Middle East-to-China route have nearly tripled this year, reaching $151,208 daily, the highest since 2020. This surge is attributed to U.S. military buildup in the Middle East and President Trump's ultimatum to Iran regarding its nuclear program, which could disrupt the Strait of Hormuz.
Additionally, a significant VLCC acquisition spree by South Korean shipper Sinokor Merchant Marine has reduced the number of available ships, further tightening the market. Experts predict military action could drive VLCC rates to levels not seen since 2019.
Nervousness is also impacting other routes, with U.S. Gulf to China journeys seeing the highest rates since late 2022. The consolidation of VLCC ownership, with Sinokor controlling approximately 120 supertankers, makes the sector more susceptible to geopolitical tensions.
