Middle East unrest, private fleet control fuel record increases in tanker rates

Freight rates for very large crude carriers (VLCCs) have surged to multi-year highs, driven by geopolitical tensions, rising oil demand, longer voyages, and a historic consolidation in tanker ownership, Bloomberg reports.

After a brief dip in January, rates began climbing sharply in February, reflecting what shipping executives describe as a fundamental market shift for VLCCs capable of carrying 1.9–2.2 million barrels of crude. South Korea’s Sinokor shipping group and Italian billionaire Gianluigi Aponte, founder of MSC Mediterranean Shipping Company, are leading the buying spree, according to interviews with brokers, vessel owners, and executives.

“Sinokor’s continued appetite for tonnage, and by and large, pricing the spot market higher than the prevailing rate level has underpinned the strong sentiment and left charterers with slim pickings for alternatives,” analysts told Bloomberg. Shipbroker Fearnleys reported that the week ending February 11 saw “healthy daily earnings upwards of USD 120k/day and above.”

Demand for crude shipments, especially from East Asia, contributed to rates reaching multi-year highs late last year, while the number of available vessels shrank. According to the US Energy Information Administration (EIA), VLCC rates from the Persian Gulf to the US Gulf Coast spiked 118% year-on-year in November, while rates from the Persian Gulf to Asia jumped 139%, citing Argus data. Supertanker rates between the Middle East and China also hit five-year highs as traders sought alternatives to Russian crude following US sanctions on Rosneft and Lukoil.

Seasonal dips in January were offset by renewed upward pressure from geopolitical concerns over US-Iran tensions and new regulations on Venezuelan oil exports.

One-year charters have increased by 20% over two months, Ole Hjertaker, CEO of SFL Corporation, said. “One very important underlying factor here on the tanker side…is that you have one party or group of people who effectively control around a third of the available or traded VLCC fleet out there,” he noted, adding that withholding ships to achieve target charter rates has reinforced the market’s strong pricing.

Svein Moxnes Harfjeld, CEO of DHT, echoed the sentiment: “We estimate the aggregators have gained control of some 120 ships…This consolidation is shifting the pricing dynamics and putting pressure on timely availability of ships.”

With fleet consolidation and ongoing geopolitical uncertainty, VLCC freight rates are expected to remain volatile, reshaping market dynamics for both charterers and owners in 2026.

By Vafa Guliyeva