The Baltic Exchange VLCC equivalent time charter rate reached $47,/day, a year-on-year increase of 41%; the Suezmax index reached $62,/day, a year-on-year increase of 149%.
Stocks of multiple crude oil tanker companies—including Frontline, Okeanis, Teekay Tankers, and TEN—all closed at their highest levels this year last Friday.
The market widely predicts spot freight rates will rise further in the fourth quarter of 2025; Jefferies expects VLCC monthly loadings from the Middle East to reach 160–165 ships in Q4 2025, higher than the 135 /month from January to May this year.
Over the past year, spot freight rates for bulk carriers have followed broadly similar trajectories. Very Large Crude Carrier (VLCC) and Capesize bulk carrier rates have fluctuated within their respective ranges but have not broken out.
VLCC daily rates peaked between $40,000 and $60,000, then fell rapidly, only to rebound just as quickly to bottom levels of $25,000 to $30,000. Capesize rates oscillated repeatedly between highs of around $35,/day and lows of around $10,/day.
What shipowners, investors, and analysts are waiting for is an inflection point, where these vessel types can break out of the ranges dominated by localized market imbalances and other short-term factors and move more sustainably upward.
VLCC Freight Rates
The VLCC sector is currently entering another cycle of rising freight rates.
This time, there is a clear, sustainable logic behind the increase: Middle East production cuts are about to end, Middle East power generation demand will seasonally decline, while global demand is expected to seasonally rise by year-end.
The Baltic Exchange VLCC equivalent time charter rate rose to $47,/day last Friday, up 79% from the recent low on July 31st and up 41% year-on-year. The exchange was closed on Monday.
Jefferies analyst Omar Nokta noted that last week’s trading activity in the Middle East, US Gulf, Brazil, and West Africa was higher than usual.
He said: “The Middle East market remains the most active, with progress showing the number of September cargoes will be higher than August, which is not surprising as OPEC+ crude shipments are returning to the market.”
Last week, 45 VLCC fixtures were completed in the Middle East, higher than the year-to-date weekly average of 32.
Clarksons Securities analyst Frode Mørkedal wrote on Monday: “Chartering activity for early-September loadings has tightened capacity. Brokers report 27 available vessels within 15 days from Fujairah, compared to the 2024 average of 41.”
He added: “Rising Atlantic production, particularly from Brazil and Guyana, will further support VLCC demand.”
However, it remains difficult to say whether this rate increase is the start of a new trend or just another unsustainable peak.
Nokta said on Monday that VLCC spot trading volume is expected to be more subdued this week.
Maritime Strategies International (MSI) pointed out: “Despite OPEC+ announcing accelerated production increases, actual output has not met targets.”
MSI currently forecasts the average VLCC spot rate for Q3 2025 at $34,/day, down 17% from Q2, despite OPEC+’s maintained commitment to increase production. The real rise is expected in Q4, when MSI forecasts the average VLCC spot rate will reach $50,/day, a 49% increase quarter-on-quarter.
Nokta also mentioned the strong outlook for the fourth quarter: “Monthly VLCC bookings from the Middle East are expected to reach 160–165 in the fourth quarter, compared to a monthly average of 135 from January to May this year, 145 in June-July, and 150 in August.”
Suezmax Tanker Freight Rates
Meanwhile, Suezmax tankers are performing even better than VLCCs.
Last Friday, the Baltic Exchange Suezmax TCE index reached $62,/day, 31% higher than the VLCC spot rate, a massive 149% year-on-year increase, and more than double the recent low at the end of July.
Fearnleys reported that Suezmax loading activity in Guyana, the CPC terminal, and West Africa was “extremely busy” last week and expects owners to “continue the positive momentum.”
Gibson Shipbrokers noted strong Suezmax activity last week in the Middle East, West Africa, US Gulf, and Black Sea, and said the Black Sea loading market “seems unlikely to cool down anytime soon.”
MSI attributed the surge in Suezmax rates in August to a “shortage of tonnage in West Africa, with spot earnings in the region and the Black Sea rising significantly.”
The strength in Suezmax has even pulled up VLCC rates.
MSI said: “Substantial gains in other crude tanker segments have provided support for VLCCs,” and expects Suezmax rates in West Africa to gradually decline as VLCCs add regional capacity.
Crude Tanker Stocks
Crude tanker stocks continue to outperform product tanker stocks, recently reaching their highest levels this year, benefiting from rising rates and positive expectations for Q4 2025.
As of last Friday, Frontline’s adjusted closing price was up 43% year-to-date and hit a new annual high.
Okeanis Eco Tankers also reached a 2025 high on the same day, up 30% year-to-date.
DHT is up 24% year-to-date, just a few cents below the high set earlier this month.
TEN is up 23% year-to-date and also set a new annual high last Friday. Teekay Tankers is up 21% and also reached its 2025 peak.
