VLCC Day Rates Soar to Rare Heights

One DHT-operated tanker recently secured a charter at a day rate north of $200,000 (File image courtesy DHT)

Daily charter rates for VLCC tankers on the Middle East to Asia run have reached their highest level since those which prevailed during the COVID pandemic in 2020. LSEG Data & Analytics, quoted by Reuters on February 24, estimated the daily rate as $170,000, whilst Bloomberg and tanker owner Frontline reported that rates had risen to $200,000. Tankers International has reported that VLCC DHT Jaguar (IMO 9733947) has been signed up for a rate of $208,000 per day by Saudi shipper Bahri. Inevitably, rising rates on the Middle East to China route will filter through into rising rates on other global routes.

The Middle East to Asia route has seen a recent rise in crude exports, potentially impacted by the tightened effect of sanctions on Russia and Iran, but also chased up by geopolitical uncertainty and stock-building. The market has also been squeezed by a substantial position being held in the spot market by the South Korean-based tanker giant Sinokor. Reflecting the short-term pricing pressures in what has been described as a frenzied market, one year charter rates on the same route are still as usual substantially less, but nonetheless have also risen sharply in the last week to approaching $100,000 per day. Marshall Island-registered VLCC DHT Redwood (IMO 9528940) was signed up on February 23 for a year to a global energy company at rate of $105,000 per day.

Pressure has been building on VLCC availability for several months now, and owners and traders have been seeking to get ahead of the curve. In a break from normal practice, Mercuria signed a deal in January to purchase four new 307,000-dwt VLCC tankers from Dalian Shipbuilding Industry Co in China, in a contract apparently worth up to $500 million. In early 2024 Mercuria had signed a deal with Singapore’s Hafnia covering the long-term charter of ten Panamax LR1s. Saudi owner Bahri, which normally has sufficient tonnage to handle Saudi exports, has also been chartering extra VLCC tonnage in recent months; it also went one step further in August 2025 by spending $1 billion to purchase nine VLCCs from Greece’s Capital Maritime.

Bahri has been active in other sectors as well. In October last year, Bahri contracted to have six Ultramax bulk carriers built by International Maritime Industries, at their yard in Ras al Khair north of Jubail, marking Saudi Arabia’s first large-scale shipbuilding project.