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US Gulf VLCC freight rates hit record highs

  • Märkte: Biofuels, Oil products
  • 07.10.26

Freight rates for very large crude carriers (VLCCs) loading on the US Gulf coast (USGC) soared to historic highs today as Asia-Pacific buyers continue to scramble to secure barrels to maintain their refined products output.

A charterer put a Sinokor-owned VLCC on subjects for a US Gulf coast to Asia-Pacific voyage loading from late November at $81mn lumpsum today, the highest recorded rate on the route since Argus began assessing it in 2017. The deal represented a $17.75mn jump day-over-day for the rate on the route, dwarfing that rate's pre-Iran war high of $22.5mn by over $63mn.

That deal was the latest after a run-up in freight rates from steady activity over the course of the day, with another charterer putting the Sea Jade VLCC on subjects for a US Gulf coast-South Korea voyage loading from early November at $77mn.

Strong Chinese crude restocking demand, which kicked off in late September, is fueling the rally in crude freight rates globally as Chinese refiners look to supply high refined products demand from throughout Asia-Pacific, with Mideast Gulf flows mostly off line. This wave of demand hit Aframaxes and Suezmaxes first, ballooning rates for these segments to their own all-time highs before sweeping back to the already elevated VLCCs after savings offered by the midsize segments shrunk. Charterers put only three VLCCs on subjects within the spot market for US Gulf coast-loading voyages in the second half of September, compared to the deluge of midsize tanker shipments in that period.

Iranian attacks on shipping within the strait of Hormuz are tightening VLCC supply overall by not only creating longer, inefficient alternative voyages but also by trapping VLCCs within the Mideast Gulf itself. At the same time, a "shuttle service" of VLCCs by operators capitalizing on very high freight rates for transiting via the strait of Hormuz to transfer crude onto tankers waiting just outside the waterway has further reduced the size of the global fleet. What were once single VLCC shipments of crude from the Mideast Gulf now involve multiple vessels, with the additional waiting time these ships need to complete transfer operations within a rapidly changing environment creating inefficiencies for every vessel segment engaged in the trade.

Meanwhile, some of these inefficiencies are holding up individual VLCCs for a month of extra travel time. A charterer put the DHT Opal VLCC on subjects today for a Yanbu, Saudi Arabia, to South Korea voyage loading from late October at $73.9mn. Notably, this shipment will require the vessel to transit north via the Suez Canal, travel west out of the Mediterranean and around the bottom of Africa to then complete its journey because of the threat of Houthi attacks within the Red Sea on Saudi shipping. The typical voyage via the strait of Bab el-Mandeb would take around 23 days, but this new routing instead requires over 50 days.

There are 29 VLCCs actively carrying Saudi crude from either Yanbu or Sidi Kerir, Egypt — the latter port from where Saudia Arabia has been shipping crude for export via the Sumed pipeline to bypass the Suez Canal — into Asia-Pacific via this route to avoid Bab el-Mandeb on 7 October, Vortexa data show.


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