Very large crude carrier (VLCC) earnings on Middle East-China voyages have exceeded $1m a day, Splash247 reports, as disruption absorbs shipping capacity and longer voyages tighten vessel availability. Atlantic earnings have climbed into the hundreds of thousands of dollars daily, while some 15-year-old VLCCs are selling for more than newbuildings. Analysts remain divided over how long the exceptional market can last.
Morgan Stanley expects effective VLCC supply to stay constrained beyond 2027, citing fleet ageing, longer journeys, floating storage and disruption. According to Splash247, the bank forecasts a further 20%-30% increase in two-year time-charter rates. It regards three-year charter rates of about $100,000 a day as a better guide to medium-term conditions than the current spot market peaks.
Broker BRS estimates that approximately 15% of mainstream VLCC tonnage has some involvement in Middle East shuttle operations. It also sees potential inventory replenishment exceeding 1.7bn barrels in 2027-28, supporting transport requirements. Sentosa Shipbrokers points to Asian refiners sourcing replacement crude from West Africa, the US Gulf and other origins, lengthening voyages while relatively few vessels ballast towards those loading regions.
Gibson’s vessel tracking indicates that the number of VLCCs occupied in the Arabian Gulf and Gulf of Oman has surpassed pre-war regional supply, despite lower absolute crude volumes. Shuttle movements, ship-to-ship transfers and delays mean moving each barrel requires more shipping capacity. The broker sees little sign of progress towards resolving the Middle East conflict, leaving disruption as a continuing constraint.
Nevertheless, BRS forecasts a steep decline in tanker returns during 2027 and 2028, albeit to levels that remain strong by historical standards. Breakwave Advisors also warns that buoyant freight markets have encouraged substantial vessel ordering, creating the conditions for an eventual downturn. Compass Maritime lists 177 VLCC deliveries scheduled across 2026-28, including 67 in 2027 and 99 in 2028.
Cargo behaviour presents another limit to the rally. Gibson says exceptionally expensive freight is already prompting some shipments to move on suezmax tankers, while elevated oil prices could restrain crude buying. Sustained high transport and oil costs therefore threaten demand, even if disruption continues to support vessel utilisation. The distinction is between a prolonged period of healthy earnings and the survival of today’s exceptional daily returns.