Freight rates surge to historic levels
Tanker markets have moved into extreme territory following the escalation of conflict in the Middle East. Freight rates were already elevated prior to the strikes on Iran, but disruption to shipping through the Strait of Hormuz has triggered an unprecedented spike in tanker earnings. According to Baltic Exchange data cited by Lloyd’s List, the benchmark Middle East–China VLCC route surged to $423,736 per day, while the global average VLCC index climbed to $280,941 per day, its highest level since at least 2008. Suezmax markets also strengthened significantly, with the Middle East Gulf–Mediterranean route reaching $267,579 per day and global average Suezmax earnings rising 23% week-on-week to $158,531 per day.

Tanker fleet capacity constrained as vessels remain in the Gulf
The surge reflects disruption to one of the world’s most critical oil shipping corridors. With insurers withdrawing war risk coverage and security conditions deteriorating, vessel movements through the Strait of Hormuz have largely halted. According to Lloyd’s List Intelligence, around 200 internationally trading crude and product tankers are currently stranded in the Persian Gulf awaiting clarity on transit conditions. This includes approximately 60 VLCCs, representing nearly 8% of the compliant global VLCC fleet, alongside 23 Suezmax vessels and numerous product tankers. With ships unable to exit the Gulf and new arrivals reluctant to enter, available tanker supply has tightened sharply across global freight markets.

Freight spike spreads across global tanker routes
The disruption in the Middle East Gulf has cascaded through global tanker markets. Baltic Exchange data shows freight rates rising sharply on Atlantic Basin routes as charterers seek alternative supply sources. The West Africa–China VLCC route increased roughly 40%, while the US Gulf–China route rose 23%, reflecting a scramble for non-Middle Eastern crude. Shipbroker BRS noted that refiners may increasingly source barrels outside the Gulf, potentially increasing demand for long-haul tanker voyages despite higher freight costs.

Market liquidity remains limited despite extreme rates
Despite the surge in freight benchmarks, actual trading activity remains limited. Shipbrokers report that many fixtures remain unconfirmed as shipowners and charterers pause activity amid the evolving security situation. Clarksons noted that “little activity has been concluded,” while brokers including Braemar and BRS highlight widespread rumours of extremely high freight levels but limited confirmed transactions.

Volatility expected as markets assess supply disruptions
The near-term outlook remains highly uncertain. According to Vortexa, crude tanker transits through the Strait of Hormuz fell to just four vessels on Sunday, compared with an average of around 24 per day since January. In the short term, the sudden removal of tanker capacity is likely to keep freight rates elevated. However, prolonged disruption to Gulf exports could ultimately constrain cargo volumes, creating a complex balance between tighter vessel supply and reduced oil flows.