VLCC Freight Rates Surge Over 800% in One Year Amid Middle East Tensions
Freight rates for very large crude carriers (VLCCs) have surged by over 800% in the past year, driven by geopolitical tensions around Iran and disruptions in the Strait of Hormuz. Daily earnings soared from about $79,700 in mid-September 2025 to nearly $723,000 by September 18, 2026, according to the Baltic Exchange. This sharp rise has significantly boosted second-hand vessel values, with prices for older VLCCs increasing by up to 62% in just two months.
The increased freight rates stem from heightened war risks and longer voyages as shipments are rerouted away from high-risk areas, reducing effective vessel availability and increasing demand for tonne-miles. This tightening supply has placed sustained upward pressure on freight costs, impacting energy-intensive industries and supply chains internationally.
Shipbrokers also report a shift in market activity toward older vessels as high earnings make even aged tankers financially viable. However, analysts warn that any de-escalation in Middle East tensions could trigger a market correction, while ongoing regional instability may keep VLCC rates and values elevated.
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