- VLCC rates jumped 25% as owners held back tonnage.
- July-loading demand from Persian Gulf emerging, testing owners’ resolve.
- Daily review of vessel transits through the Strait of Hormuz.
The escalating missile conflict between Iran and Israel has led to a sharp rise in very large crude carrier (VLCC) freight rates, as shipowners become increasingly cautious and withhold vessels from the market, reports Platts.
Between June 13 and June 16, rates on the Persian Gulf–China VLCC route surged by approximately 25%, rising from Worldscale W48 to W60, equivalent to around $13.27 per metric ton. This marks one of the steepest and swiftest freight rate increases in recent months.
Much of the upward pressure on rates stems from owners choosing to keep their vessels off the spot market due to the high level of uncertainty and security risks in the region. Many owners are adopting a wait-and-see approach, holding back tonnage and avoiding committing ships to transits through the Strait of Hormuz—a key chokepoint for global oil transportation.
Sharp rise in VLCC freight rates
Despite the cautious stance from owners, demand remains strong, particularly for July loadings from the Persian Gulf. Charterers have started inquiring for early July bookings, reflecting confidence in sustained demand for crude shipments. This growing demand, paired with a restricted pool of available VLCCs, has reinforced bullish sentiment in the freight market.
The impact is not limited to VLCCs alone. Freight rates for Suezmax and Aframax tankers have also started to climb, as owners of those vessel classes follow a similar strategy of delaying offers and assessing risk before committing to voyages. Meanwhile, the shipping industry is bracing for a potential rise in war-risk insurance premiums, especially for transits through high-risk zones.
As the geopolitical situation in the Middle East remains tense, the shipping market is adjusting to a more cautious and restricted operating environment. With owners keeping tonnage off the table and charterers eager to secure vessels, freight rates could remain high—or climb further—if conflict escalation continues.
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Source: Platts
