A strong VLCC market is likely to lift Suezmax and Aframax rates in 2026.
Sanctions shifted Indian crude buying from Russian to Mideast Gulf grades in late 2025, coinciding with Opec+ gradually unwinding production cuts. This Mideast Gulf VLCC trade has expanded as a result, drawing VLCC owners away from Suezmax routes such as west Africa to Europe, where they had been competing. This has increased Suezmax demand and rates. The effect has also filtered down to Aframax tankers as Suezmax owners returned to their traditional routes, boosting Aframax chartering.
With firmness in VLCC rates expected to continue in 2026, Aframax and Suezmax rates will probably stay elevated after the usual early first-quarter dip. This often happens as Suezmax owners raise offers while remaining cost-competitive compared with VLCCs, which then trickles down into Aframax rates.
A factor that could pressure Aframax and Suezmax freight rates in the coming year is a widespread return to the Suez Canal, after many shipowners rerouted around the Cape of Good Hope to avoid attacks by Yemen-based Houthi militants.
The Houthis have declared a ceasefire alongside the truce between Israel and Hamas in Gaza. With the situation uncertain, most mainstream tanker owners still prefer the longer Cape route. Container shipowners have been testing the waters but have not signalled a full resumption of traffic. Danish shipowner Maersk is considering a return to the Suez Canal but has not set a date. CMA CGM has sent two ships through the canal in recent weeks but has not indicated it will use the route for all cargoes. Crude tanker owners may consider following suit.
A full return to the canal would significantly shorten journey times, particularly for Iraqi Basrah crude into the Mediterranean and northern Europe, which would in turn pressure rates because tankers are out of the market for a shorter time.
A firm newbuild orderbook in 2026 may have a limited effect on spot rates because most new tankers will replace older vessels, keeping fleet size steady. The crude tanker orderbook recently hit a nine-year high relative to the existing fleet. The order book-to-fleet ratio for crude tankers ended October at 14.1pc, the highest since 2016, according to shipping association Bimco. This could pressure rates in about 2-3 years when these ships are delivered.
