- Early 2025 saw a significant drop in VLCC dirty tonne-days, marking one of the weakest growth phases in recent years.
- The Middle East Gulf to China route showed signs of recovery, likely due to China’s response to Russian crude import restrictions.
The Very Large Crude Carrier (VLCC) segment has encountered a notable downturn in dirty tonne-days since the start of 2025, marking one of the weakest growth phases in recent years, reports Breakwave Advisors.
This decline aligns with shifts in global crude oil trade patterns, influenced by recent policy decisions and geopolitical tensions.
Key Factors Influencing the Downturn
- Policy Shifts: Recent decisions by the Trump administration have altered U.S.-China relations and crude export regulations, contributing to uncertainties in tanker demand.
- Geopolitical Tensions: Increased tensions in the Middle East have further complicated the tanker market, leading to a realignment of trade routes and demand.
- Sanctions on Russian Crude: New sanctions affecting Russian crude oil exports to China have prompted a search for alternative supply sources, impacting VLCC demand.
AG-China Route Shows Signs of Stabilization
Despite the overall downturn, the Middle East Gulf (AG) to China route has demonstrated some stabilization. This improvement is likely a response to restrictions on Russian crude imports, with China seeking alternative suppliers. However, freight rates on this route remain subdued, indicating that increased tonne-days have not yet led to stronger market rates.
Market Outlook
The persistent decline in VLCC dirty tonne-days raises concerns about the demand outlook for large crude carriers. While the AG-China route offers a glimmer of hope, geopolitical factors continue to shape market sentiment. A full recovery in VLCC freight rates may be contingent upon supply adjustments and a significant increase in crude flows.
For a comprehensive analysis, refer to Breakwave Advisors’ detailed report on VLCC dirty tonne-days.
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Source: Breakwave Advisors
