- Sales and Newbuilding Orders Drop Sharply Year-on-Year.
- Notable VLCC Transactions Highlight Market Resilience.
- Charter Rates Surge Past USD 50,000/Day.
The Very Large Crude Carrier (VLCC) segment is showing some solid fundamentals in 2025, thanks to a surge in Chinese demand for building strategic reserves and a fleet supply that’s historically tight. The momentum in rates has been quite impressive, fueled by increased buying activity following adjustments in Saudi pricing and a lack of new tonnage hitting the market. According to VesselsValue Timeseries data, VLCC values have been on a steady rise since the beginning of the year, although they’re still below last year’s peak 15-year highs. For instance, the value of 5-year-old VLCCs weighing in at 320,000 DWT has climbed from USD 109.8 million to USD 113.62 million, reports Veson.
Decline in Sales and Newbuilding Orders
On the flip side, VLCC sales and newbuilding orders have taken a significant hit year-on-year. Total sales dropped by about 27%, going from 113 in the first nine months of 2024 to just 83 during the same timeframe in 2025. Newbuilding orders for VLCCs have nearly halved as well, with only 35 placed this year compared to 69 in the first nine months of 2024.
This slowdown can be linked to record-high newbuilding prices, longer yard delivery timelines, and uncertainty around fuel technology, which have all made potential buyers hesitant. Despite these challenges, owners are still holding onto their profitable assets, given the historically strong earnings.
Notable Recent Transactions
Some recent transactions in the VLCC market include:
- Four newbuilding resales of 306,000 DWT bought by Dynacom, set for delivery between 2026 and 2027, sold as a package for USD 118 million each (with a VesselsValue estimate of USD 118.9 million).
- Four newbuilding resales of 306,000 DWT acquired by Seatankers, also under construction at Hengli Shipyard, are expected to be delivered in 2026, sold as a package for USD 118 million each (with a VesselsValue estimate of USD 120 million).
Rising Charter Rates
In September, one-year timecharter rates for VLCCs soared past USD 50,000 per day, climbing about 12% from USD 46,333 to USD 51,333. Some routes even reached a staggering USD 100,000 per day on the spot market, marking the first time we’ve seen such highs since March 2023.
This surge in rates can be attributed to a mix of seasonal trends and geopolitical events, like China’s strategic reserve purchases of around 0.5 million barrels daily and Saudi Arabia’s USD 1 per barrel price cut on September 9, which spurred more buying from China. With minimal fleet growth and inefficiencies in ton-mile due to longer voyage routes, the market has tightened even further.
Supply-Side Constraints
Demolition rates are incredibly low, with just two VLCCs sent for scrapping this year. The ageing fleet, combined with limited scrapping, means supply is still tight, which has helped keep asset valuations historically strong, even as transaction volumes have slowed down.
Market Outlook
Looking ahead to 2025, the VLCC segment is set to benefit from solid structural support on the supply side, including:
- Minimal fleet growth
- An ageing vessel profile
- Limited demolition activity
- Ongoing ton-mile inefficiencies
These elements have created a structurally tight market, putting VLCCs in a favourable position as we approach the end of the year. However, as demand patterns evolve and trade dynamics shift, it will be crucial to keep an eye on these fundamentals to maintain stability.
Did you subscribe to our daily Newsletter?
It’s Free Click here to Subscribe!
Source: Veson
