Oil Companies Rush for Supertanker Capacity as Benchmark Freight Doubles
N.R. Finch
Oil companies are racing to lock in VLCC — very large crude carrier — capacity, with benchmark day rates nearly doubling from roughly $200,000/day since the conflict began, as war and shifting trade flows redraw global crude shipping lanes.
Why have freight rates surged so fast?
South Korea's Sinokor Group bought ships on a large scale, tightening the pool of VLCCs available for charter and pushing rates higher.
The Iran war disrupted established trade routes, forcing fleets onto longer voyages — longer voyages = slower turnaround per vessel = even less available capacity.
This means → two forces stacked: fewer ships on the supply side, longer routes on the demand side. Benchmark day rates nearly doubled from roughly $200,000/day.
What exactly are oil companies scrambling for?
DHT Holdings CEO Svein Moxnes Harfjeld said his clients are "all scrambling for security of transportation" — locking in vessel slots matters more than negotiating price.
In plain terms = when capacity is tight, having a ship beats having a cheap rate. Oil majors will pay a premium to ensure crude arrives on time.
What does consolidation in the VLCC market mean?
Harfjeld noted commercial consolidation is under way — fewer large owners control a growing share of capacity.
He acknowledged that "while this has a positive impact on the market, not all clients recognize and welcome it."
This reflects a tension: consolidation improves efficiency, but it also weakens oil companies' bargaining power — the list of available owners keeps shrinking.
How will global crude flows be redrawn?
Heidmar CEO Pankaj Khanna expects that once the situation normalizes, more crude will flow from the Atlantic basin to Asia.
Analysts say Asian importers are reducing dependence on Middle Eastern supply, shifting toward Atlantic-basin producers.
This means → demand for VLCCs on ultra-long-haul routes will receive sustained structural support, not just a short-term spike.
Content is for reference only, not financial advice.