- Persian Gulf-China Route Sees Sharp Jump to W132.5.
- Chinese Port Congestion and Rising Demand Tighten Tonnage Supply.
- Global VLCC Laden-Ballast Spread Narrows, Indicating Active Fleet.
Asian Very Large Crude Carrier (VLCC) freight rates have surged to their highest point since the post-COVID recovery. Industry insiders report that congestion at Chinese ports and robust loading demand have slowed down fleet turnaround, tightening the availability of tonnage across the region. As of October 30, the cost of transporting crude from the Persian Gulf to China has climbed to $29.39/mt (W132.5), according to S&P Global Commodity Insights, reports S&P Global.
Significant Increase in Persian Gulf-China Route
On October 29, during trading in London, a Chinese state-owned company put the Front Otra on subjects for a November 16 loading of 270,000 mt of crude at W127.5, a notable rise from W105 earlier that same day. The benchmark route hasn’t seen levels like this since March 2023. Platts reported the Global VLCC Index (GVI 7) for non-eco vessels at $100,610/day, while the GVI 7S for scrubber-fitted, eco vessels stood at $109,072/day, based on the Persian Gulf-China rate of W105.
“[The] tonnage list is reasonably tight. No choice [for charterers], the West is quite active also… too many boats will be lured toward [the] West,” a VLCC charterer said, referring to the limited ship availability.
Global Tonnage Availability Tightens
According to S&P Global Commodities at Sea (CAS), the global VLCC laden-ballast spread jumped to 39 in the week starting October 26, a sharp increase from minus 15 the previous week. A smaller spread indicates that more ships are loaded and fewer are available for new voyages, reflecting a decrease in fleet flexibility. For context, on August 10, the spread was minus 131, when rates were hovering in the high W50S, indicating a much weaker market back then.
Congestion at Chinese Ports Intensifies
“Anchored VLCC counts in Chinese ports more than doubled between late September and late October, rising from approximately 10 in the week beginning Sept. 21 to a year-to-date high of 21 by the week beginning Oct. 26,” said Kevin Zhao, Shipping Analyst at Commodity Insights.
Zhao said the congestion has delayed discharge operations, preventing laden VLCCs from starting their ballast voyages on time and reducing vessel availability in major loading regions.
Charterers Face Challenges in Finding Ships
Several charterers have reported limited offers for cargoes, often receiving just two responses per inquiry. A VLCC charterer based in Beijing mentioned that around 12 cargoes were available in the market on October 29, but only 25 vessels were on hand. While tonnage is gradually returning, the ongoing clustered loading activity continues to foster a strong sentiment among ship owners.
Trade Flow Shifts Boost VLCC Demand
In September, India ramped up its crude imports from the US via VLCCs, hitting 464,000 barrels per day (b/d), up from 356,000 b/d in August. This is a significant jump compared to the monthly average of 217,000 b/d earlier in 2025, as reported by CAS. The increased distance of the journey between the US and India has also contributed to a rise in global VLCC utilisation, tightening the supply of available tonnage even further.
Voyage Speeds Slow, Extending Fleet Turnaround
According to CAS data, the average laden speed of VLCCs dropped from 12.4 knots in mid-September (week 38) to 12.1 knots by late October (week 43). While this decrease might seem small, it actually leads to a noticeable extension in voyage times. For instance, a journey from Ras Tanura to Ningbo now takes about 19.8 days at 12.1 knots, compared to 19.32 days at 12.4 knots, almost half a day longer. This slowdown is adding to the existing supply constraints in the VLCC market.
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Source: S&P Global
