- VLCC orderbook remains tight with limited new deliveries through 2025, unlike mid-size segments.
- Rising refinery throughput in the Middle East, West Africa, Brazil, and Canada is boosting long-haul VLCC demand.
- VLCCs maintain a cost-per-barrel advantage on long routes, supporting their role in diversified oil flows.
- Spot rates are up 41% year-over-year, with stronger Middle East loadings and surging Brazil–China tonne-mile demand tightening vessel supply.
A recent analysis in Poten & Partners’ Ready For A Rebound report points to Very Large Crude Carriers (VLCCs) as likely frontrunners in the next tanker market upswing, according to Breakwave Advisors LLC.
Why VLCCs Could Lead the Market Rebound
The Very Large Crude Carrier (VLCC) segment is positioned to benefit first from a market recovery, supported by several factors. The orderbook remains tight, with only one vessel delivered last year and just six more expected through 2025, compared to higher newbuilding activity in mid-size tanker classes. Demand patterns are also favorable. Rising refinery throughput in the Middle East and West Africa, along with strong export flows from Brazil and Canada, are creating long-haul trade opportunities where VLCCs are better suited than smaller tankers.
Economics further strengthen the case. VLCCs continue to provide lower transportation costs per barrel on longer routes, a key advantage as OPEC+ supply expands and oil flows diversify across regions. Spot rates already reflect this momentum. By late August, the Baltic VLCC TCE index was averaging about $47,300 per day, a 41% increase compared with the previous year. Jefferies projects Middle East loadings could rise to 160–165 per month in the final quarter of 2025, up from about 135 per month earlier in the year.
Additional support is coming from Latin America. According to Signal Ocean, tonne-mile demand from Brazil to China has nearly doubled since March, adding close to 1 billion nautical miles to the rolling weekly average. This growth is reducing vessel availability in the Atlantic basin and reinforcing upward pressure on VLCC freight rates.
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Source: Breakwave Advisors LLC
