The latest market update from Breakwave Advisors highlights a VLCC sector that remains unusually firm despite signs of cooling in Russian crude flows to India.
Benchmark VLCC routes such as Middle East to China and Arabian Gulf to West Africa continue to post multi-year seasonal highs, supported by tight vessel supply in key loading regions. Net availability from the Arabian Gulf and West Africa remains constrained, keeping rates elevated even as tonne-mile expansion has moderated. This supply-driven tightness underscores that limited tanker availability, rather than exceptional cargo demand, is the main force sustaining high freight levels.
Evolving trend in Russian crude shipments
A major focus in the report is the evolving trend in Russian crude shipments heading to India. Although November arrivals appeared to rebound to a multi-month high, this largely reflects heavy front-loading before the 21 November sanctions deadline. As the deadline passed, the 21-day moving average of Russian loadings fell sharply—around 30 percent below late-October levels—indicating a meaningful slowdown. One prominent Indian refiner had already halted intake of Russian barrels at its SEZ refinery in mid-November, and cargoes associated with sanctioned entities now face higher compliance burdens, increased financial scrutiny, and the possibility of diversion. While some flows through non-sanctioned intermediaries remain possible, the confirmed volumes so far remain limited compared with pre-sanctions levels.
Despite the drop in Russian inflows, VLCC freight remains elevated due to persistent vessel scarcity. Discharge-port congestion, particularly in China, along with steady demand for long-haul shipments from alternative exporters, continues to absorb available tonnage. This mismatch between demand and supply supports the view that the current market strength could extend into early 2026 unless there is a significant loosening in tanker availability or a more dramatic decline in cargo activity. Even rising flows from the Middle East, West Africa, or the Americas may not be enough to ease conditions if port and regulatory bottlenecks persist.
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Source: Breakwave Advisors
