Despite a slight dip in overall tanker sale and purchase (S&P) volume this year, the market for older crude tankers, particularly VLCCs and Aframaxes, has remained surprisingly strong. Buyers are focusing on vessels with an average age of 14 years, demonstrating that firm earnings and tight availability are outweighing concerns about age.
Market Trends and Vessel Values
According to data from VesselsValue, there have been 228 crude tanker deals this year, a 9.2% decrease from 249 in the same period of 2024. However, this is not a sign of cooling sentiment for older vessels, as their values have been increasing. For example, the value of 20-year-old VLCCs has surged by about 18.4% this year, from $33.14 million to $39.12 million. Similarly, 20-year-old Aframaxes have seen a modest increase of about 1.21% in value. In contrast, Suezmax values have softened, likely due to a larger supply of aging ships for sale.
The “Dark Fleet” and Geopolitical Influence
A significant factor supporting this market is the continued growth of the “dark fleet,” which consists of vessels operating outside mainstream shipping to evade sanctions. This fleet, which now includes approximately 692 vessels (12% of the live tanker fleet), is largely made up of older crude units between 12 and 18 years old. These vessels are desirable due to their lower acquisition costs, short-term earnings potential, and their viability in current trading patterns, especially for transporting Russian oil. Geopolitical tensions, such as the crises in the Red Sea and the Strait of Hormuz, have also played a crucial role by forcing operators to reroute voyages. This has increased ton-miles and tightened vessel availability, leading charterers to favor readily available—and often older—ships.
Earnings and Notable Sales
Strong earnings fundamentals are also contributing to the market’s momentum. VLCC one-year time charter rates have improved by about 13% since the beginning of the year, reaching around $46,614 per day. Aframax and Suezmax rates have remained stable at levels well above historical averages. These high earnings provide a strong incentive for owners to either sell their older vessels at a profit or continue trading them rather than sending them for scrap. Recent notable sales include the VLCC Atlantic Loyalty (2007-built) selling for $44 million, and the VLCC City of Tokyo (2004-built) selling for $41.5 million, significantly above its VesselsValue valuation.
In conclusion, while the number of crude tanker transactions has dipped slightly, the demand for older vessels remains robust. The market is expected to remain firm well into next year, unless there is a dramatic softening of freight markets or a more rapid tightening of regulatory enforcement.
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Source: Vessels Value
