Gulf Tanker Daily Rates Nearly Double, VLCC Earnings Hit All-Time High
0xBroomberg
After the Strait of Hormuz partially reopened, Middle East producers rushed to ship while roughly 100 tankers remained trapped inside the Gulf — Gulf tanker day-rates nearly doubled in a week and VLCC daily earnings hit a record $470,000, blowing open short-term profit upside for shipping names.
How big is the rate spike?
Day-rates outside the strait jumped from $106,500 a week ago to $190,500 — up roughly 79%.
For cargoes that must transit the strait, VLCCs (Very Large Crude Carriers — supertankers carrying ~300,000 tonnes) now earn nearly $470,000/day, up more than $50,000 from a week earlier — an all-time record.
This means → one VLCC earns an extra $50k per day; over a single ~45-day voyage, that adds over $2 million in incremental profit.
Why does "reopening" push rates higher, not lower?
Reopening gave producers the confidence to ship aggressively, unleashing a demand surge — but ~100 tankers remain stuck inside the Gulf, leaving available tonnage extremely tight.
In plain terms = more cargo wants to load, yet the number of ships that can actually move hasn't grown — demand up, supply pinned, price spikes.
Clarksons notes that despite sharply lower cargo volumes since the conflict began, spot tanker earnings have stayed above $100,000/day — "the supply side remains extremely tight; Hormuz reopening will tighten capacity further."
Who is scrambling for ships?
Abu Dhabi's ADNOC issued dense tenders this month, urging buyers to load directly from Gulf ports — directly pulling demand for strait-transiting vessels.
India's Reliance Industries, the country's largest refiner, is sourcing crude from the Middle East to fill months of supply gaps.
South Korea's Sinokor sent its supertanker *Belgium B* into the Gulf on Monday, heading for an Iraqi port — one of several vessels the group has sent through the strait recently.
Insurance costs fell — how much does that offset?
War-risk insurance dropped over five days from ~5% of hull value to ~3% (pre-discount), saving hundreds of thousands of dollars per vessel.
This means → insurance savings partially offset rate increases, but the offset is modest — daily rate gains far exceed the insurance reduction.
This reflects a marginal improvement in market confidence around Hormuz transit safety — but conditions remain far from normal.
How long can rates stay this high?
Current strait traffic remains well below the pre-conflict average of 125 transits per day; whether the ~100 trapped tankers can exit is the key variable.
In plain terms = if stuck ships clear the strait en masse, available tonnage recovers and rates fall; if the bottleneck persists, elevated rates continue or climb further.
This reflects that current pricing is not "normal market equilibrium" but stress-pricing driven by an extreme supply bottleneck — direction depends entirely on the pace of Hormuz reopening.
Content is for reference only, not financial advice.