VLCC Freight Rates and Charter Market, November 2026 — Routes, Time Charters, Costs

Where are VLCC spot rates on the main routes?

The Baltic Exchange publishes the reference rates for very large crude carriers (VLCCs). Each route is quoted in Worldscale (WS), a percentage of a published flat rate, or as a lump sum. The exchange also converts each rate into a time-charter equivalent (TCE), the daily earnings after voyage costs.

In its report of 23 October, TD3C, the 270,000-tonne Middle East Gulf–China route, stood at WS1,208.13 ^[1]. That was down 88 points on the week and gave a TCE of $1,287,851 a day ^[1]. TD34, from the Gulf of Oman to China, fell 146 points to WS620, or $656,587 a day ^[1]. TD15, West Africa–China, dropped 147 points to WS556.13, equal to $550,946 a day ^[1]. TD22, the US Gulf–China route, fell $11.4 million to a lump sum of $58.22 million, or $451,905 a day ^[1].

Rates were easing from a peak. Two weeks earlier, TD3C was at WS1,318.75, or $1,412,594 a day, and TD22 was $79,611,111 ^[5]. Reuters reported a VLCC fixed provisionally at $81 million to load US crude for Cosmo Oil in November ^[7]. Other charterers failed to book ships at $76 million to $77 million ^[7].

The Baltic does not publish a separate Brazil–China VLCC index in these reports. OilPrice.com put Brazil–China freight at around $36 a barrel by mid-October ^[6].

How did the Hormuz disruption reshape VLCC freight in 2026?

The war that began on 28 February transformed the market ^[7]. On 9 January, TD3C paid $55,540 a day, TD15 about $54,500 and TD22 just under $60,000 ^[2]. By 27 March, TD3C had reached $356,483 a day ^[3]. Rates eased over the summer, to close to $286,500 a day on TD3C on 3 July ^[4]. They then climbed to records in October ^[5].

Freight now depends heavily on where a cargo loads. Vortexa data published by Cyprus Shipping News show Ras Tanura–Ningbo freight about $12 a barrel above Fujairah–Ningbo over four weeks ^[8]. Cargoes loaded outside the strait avoid the most dangerous leg ^[8]. On the Red Sea side, OilPrice.com says Yanbu–China freight rose from $6–7 a barrel to $28 by mid-October ^[6].

The Atlantic has tightened too. Data published by Cyprus Shipping News counted 192 ballast VLCCs east of Suez in mid-October, against 56 west of Suez ^[17]. Ballast VLCCs heading to the Atlantic fell to a six-year low on 15 October, according to Vortexa ^[8]. Atlantic crude cost $8–16 a barrel more to ship to Ningbo than Fujairah crude, against $1–3 through 2025 ^[8].

Shuttling inside the Gulf absorbs ships. Kpler says the Gulf of Oman shuttle fleet has grown to about 80 VLCCs ^[9]. Average round voyages take 23 days, against an optimal 9–10 days for a Basrah–Sohar trip ^[9]. Most shuttles transfer their cargo ship to ship to tankers waiting in the Gulf of Oman ^[10].

How do time-charter rates compare with spot?

A time charter hires a ship for a fixed period at a daily rate, with the charterer paying fuel and port costs. Term rates have risen far less than spot. Clarksons Research data reported by ChosunBiz put the one-year VLCC rate at more than $210,000 a day in early October ^[11]. Before the war it was about $130,000 ^[11].

Company fixtures show the same gap. In February, DHT announced a one-year charter at $90,000 a day ^[12]. Frontline fixed two newbuildings for one year at $120,000 a day from late June and early July ^[13]. It fixed two 2016-built ships for two and three years at average rates of $90,000 and $75,000 a day ^[13].

Frontline's own VLCC spot earnings averaged $152,700 a day in the second quarter ^[13]. TD3C was at $1,287,851 a day on 23 October ^[1]. The gap suggests the market expects today's spot levels to fade. For a charterer, a period deal swaps upside risk for a fixed cost. For an owner, it locks in income well above pre-war levels.

How big is the VLCC fleet and what is on order?

Estimates of the fleet vary with the definition. Clarksons Research counts 912 ships including ultra-large carriers, while McQuilling counted 851 in February, excluding ships older than 25 years ^[11]. Argus estimated 880 VLCCs on the water ^[12]. Clarksons puts the average age at 13.5 years, with 42.6% of the fleet 15 years or older ^[11].

Ordering has surged. About 319 VLCCs are on order, equal to 34% of the fleet, according to estimates reported by DatamarNews ^[14]. Excluding sanctioned vessels from the fleet, the ratio is 42% ^[14]. Only one VLCC was delivered in 2024 and six in 2025, but more than 100 a year are projected for 2028 and 2029 ^[14]. Just four VLCCs were demolished in the first nine months of 2026 ^[14].

Asset prices reflect the earnings. A 15-year-old VLCC was valued at about $165 million, above the $131.5 million for a new order ^[14]. Macquarie analysts said current fees could pay for a new ship in months of shuttle runs ^[15].

The shadow fleet matters to the compliant market. TankerTrackers.com counted 230 shadow-fleet VLCCs, Argus reported in February ^[12]. Those ships are not available to mainstream charterers, which narrows the usable fleet. In the current crisis, some previously blocked vessels "are being delisted or are being licensed" for certain transactions, a maritime lawyer told Bloomberg ^[10]. Goldman Sachs attributes $2 a barrel of the rise in crude freight to the blockage of the Iranian fleet ^[15].

What else adds to the cost: congestion, bunkers, insurance and demurrage?

Goldman Sachs puts the global average crude freight rate above $20 a barrel, against $3 a year earlier ^[15]. It attributes $7 to the Hormuz war-risk premium ^[15]. Ship-to-ship transfers outside the Gulf and higher bunker (marine fuel) prices add $4 each ^[15].

Congestion ties up ships at both ends. The Joint Maritime Information Center estimated about 492 vessels waiting outside the strait on 25 October ^[16]. In China, 12 VLCCs on average were waiting to berth in the week to 15 October, up 14% ^[17].

Insurance comes in two parts. War-risk cover is bought per voyage: OilPrice.com puts it at 7–8% of hull and machinery value, or $4–5 a barrel for an average VLCC ^[6]. Protection and indemnity (P&I) insurance covers third-party liabilities and renews each year. Broker Lockton expects average general increases of 5% at the 2027 renewal, and Gallagher 2.5% to 5% ^[18].

Delay is the other big cost. OilPrice.com cites Gulf demurrage, the daily charge for time beyond the agreed laytime, at $1 million a day ^[6]. That is about $0.50 a barrel for each day a laden VLCC waits ^[6].

How does a VLCC voyage charter work for charterers?

Most spot fixtures use a voyage charter. The charterer pays freight in Worldscale points or as a lump sum ^[1], and the owner runs the ship and pays its fuel. Asbatankvoy is a widely used tanker form, often heavily amended with a charterer's own terms ^[19].

Laytime is the time allowed to load and discharge. Under one amended Asbatankvoy charter examined by Steamship Mutual, laytime started six hours after the notice of readiness was received ^[19]. Time beyond laytime is paid as demurrage at the agreed daily rate ^[19].

War-risk clauses decide who carries conflict costs. Under BIMCO's CONWARTIME 2013, charterers reimburse owners for extra war-risk premiums ^[20]. The 2025 version lets charterers ask for proof of reasonable efforts and challenge excessive premiums ^[20]. VOYWAR lets owners refuse to proceed to a place exposed to war risks and ask for another port ^[20].

Per-barrel costs make the numbers comparable. Reuters described an $80 million US Gulf–China charter as carrying two million barrels, or $40 a barrel, against $8.60 before the war ^[7]. On that cargo size, the 23 October TD22 lump sum works out at about $29 a barrel (our calculation) ^[1,7].

Valero's Randy Hawkins said moving a VLCC from the Gulf Coast to Asia now costs about $30–35 a barrel, against about $5 in 2025 ^[9]. Asian refiners have cut November orders for US crude by about 50% from September, Bloomberg reported ^[9]. Producers are adjusting too: OilPrice.com reported West Africa's Djeno at a free-on-board discount of around $10 a barrel to ICE Brent ^[6].

What is happening to VLGC (LPG carrier) freight?

Very large gas carriers (VLGCs) move most long-haul liquefied petroleum gas (LPG). The Baltic quotes them in dollars per tonne. BLPG1 runs from Ras Tanura to Chiba, and BLPG3 from Houston to Chiba.

On 9 January, BLPG1 stood at $80.83 a tonne and BLPG3 at $145.17 ^[2]. By 9 October they had reached $265.00 and $344.71 ^[5]. On 23 October BLPG3 fell $29.14 to $305.71, equal to $181,218 a day ^[1]. BLPG1 was $252.40, or $242,380 a day ^[1].

The Houston route pays more per tonne but less per day than the Gulf route, because its voyage is much longer ^[1]. For Asian LPG buyers, that makes freight a large part of the delivered cost of US cargoes.

What to watch

• Diplomacy and security. More shuttle tankers are unlikely to lower rates while Iran keeps up the threat of attacks, Kpler's Muyu Xu told Bloomberg ^[10].
• US crude to Asia. A 50% fall in Asian orders could free VLCCs in the Atlantic ^[9].
• Atlantic ballasters. Atlantic-bound ballast VLCCs have risen 10% from their 15 October low ^[8].
• Deliveries. Net fleet growth is put at about 4% in 2026 and 5.7% in 2027, before the larger 2028–29 wave ^[14].
• Insurance renewals. P&I general increases for 2027 and any change in war-risk terms ^[18,20].

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