Oil Shipping Boom Redraws Global Trade Map as VLCC Rates Soar

The global oil shipping market has experienced a dramatic surge in daily rates, with VLCC (Very Large Crude Carrier) time charter equivalent (TCE) rates reaching $1.2125 million per day on September 17.

This represents a nearly tenfold jump from just six months ago, when the rate stood at $117,400 per day before the U.S.-Iran conflict erupted in February.

The increase is attributed to several factors, including structural shifts in Middle East crude exports following the blockage of the Strait of Hormuz, resulting in longer voyage times and reduced effective capacity.

Japanese and South Korean refiners have also pivoted to U.S. Gulf crude, increasing ton-mile demand and driving up rates on key routes such as TD15 West Africa-to-Far East and TD22 U.S. Gulf-to-Far East.