VLCC tanker market sees surge in rates and vessel values

The market for Very Large Crude Carriers (VLCC) is experiencing a massive surge in both daily charter rates and second-hand vessel values. This trend has accelerated significantly since late July, driven by geopolitical instability surrounding Iran and the Strait of Hormuz, which has increased war risks and reduced the actual availability of ships for commercial use.

According to data from the Baltic Exchange, average daily VLCC rates rose from approximately $198,000 in July to $272,000 in August, climbing to nearly $449,000 in early September, and reaching approximately $722,946 by September 18. This dramatic increase in revenue has directly boosted the valuation of existing vessels in the second-hand market.

Specifically, between July 10 and September 18, the reference price for a five-year-old VLCC rose by 18.6%, from $145 million to $172 million. Ten-year-old vessels saw a 32% increase, rising from $115 million to $152 million. The appreciation is even more pronounced for older ships, with fifteen-year-old vessels seeing a nearly 61% increase in value. The demand is further fueled by longer shipping routes and the need to source crude oil from alternative regions.