VLCC tanker rates surge as shipping avoids Strait of Hormuz

The Very Large Crude Carrier (VLCC) market is experiencing a significant shift as high charter rates extend beyond traditional conflict zones. A VLCC linked to Greek shipping interests has reportedly reached a deal for a voyage from the US Gulf to China for approximately $24.8 million, representing a daily rate of about $260,000. This transaction, which is currently ‘on subjects’, highlights a trend where long-haul voyages from the Atlantic to Asia are becoming more prominent due to Chinese demand for crude oil.

Simultaneously, maritime activity in the Strait of Hormuz has seen a sharp decline. Data from Kpler indicates that vessel transits through the strait dropped by 50% within a 24-hour period, with only seven vessels passing through compared to 14 the previous day. Notably, no VLCCs or LNG carriers were recorded during this period, as major owners avoid the region due to heightened operational and economic risks, including increased war insurance premiums and potential security threats. This avoidance of the Strait of Hormuz is effectively limiting the available global tonnage for energy transport.