- VLCC benchmark rates nearly doubled in September, marking the strongest surge since the 2020 floating-storage spike.
- Improved tonne-mile demand from the Middle East Gulf and longer trans-Atlantic to Pacific voyages are key drivers of the rally.
- Geopolitical shifts, limited fleet growth, and seasonal factors are tightening supply and supporting higher rates.
- Market implications include tighter negotiating ranges for modern tonnage and anticipation of a sustained Q4 upcycle.
The VLCC market experienced a remarkable upswing in September, with benchmark rates nearly doubling in just over two weeks, signaling a major shift in market dynamics. On the Baltic series tracked by Xclusiv Shipbrokers, daily rates climbed from around USD 45,155 on 1 September to USD 87,532 by 18 September, marking a 94% increase in less than three weeks. According to the latest report published by Safety4Sea, this surge reflects a significant regime change in the sector.
Historic VLCC Surge in September
Xclusiv Shipbrokers notes that VLCC rates haven’t reached current levels in over five years. The last time the Baltic index exceeded today’s mark was on 30 April 2020, during the floating-storage super-spike, when rates briefly topped USD 92,500/day. Even the March 2023 rally stalled around USD 77,600/day. This September breakout represents the strongest surge since the pandemic storage episode and marks the first time in 2025 that VLCCs have decisively reclaimed leadership from midsize crude segments.
Several factors are driving this rally. Fundamentally, tonne-mile demand has strengthened in VLCC-intensive trades. Fixtures from the Middle East Gulf gained momentum through mid-September, while trans-Atlantic to Pacific VLCC voyages rebounded from summer lows, extending voyage lengths and tightening the available tonnage list. The sustained high rates, with charterers keeping vessels on-subs rather than cancelling, signal genuine supply-demand pressure.
Key Drivers and Implications for the VLCC Market
Geopolitical developments are reshaping VLCC flows. Sanctions and trade frictions have redirected Russian-related cargoes, increasing demand for compliant VLCC capacity. Meanwhile, the compliant VLCC fleet has seen minimal growth since 2021, as older vessels exited the active pool. This combination of rising demand against structurally tight supply creates strong upside potential.
Seasonal and macro factors further support the surge. Historically, Q4 is the strongest period for VLCCs, and OPEC+ is gradually raising output toward year-end. Forward programs are already being cleared at higher rates, while refinery maintenance and potential inventory builds in Q4 and Q1 add conditions for contango and modest floating storage, quickly absorbing capacity and pushing rates higher.
Market implications are evident. Broker assessments and pool prints have already reported six-figure rates for individual voyages, even as the Baltic index remains just below that threshold. Route mix, eco/scrubber premiums, and timing differences explain the variation, but the overall trend is unmistakable. For sale and purchase activity, this shift tightens negotiating ranges for prompt modern tonnage, while period charters encourage owners to maintain spot exposure in anticipation of further Q4 gains. Unless there is a sudden reversal in oil supply or market sentiment, September’s jump appears to mark the start of VLCC’s delayed upcycle rather than a short-term spike.
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Source: Safety4Sea
