Tankers: Earnings at highest levels since 2022 as Gulf flows reroute through alternative corridors
Average VLCC earnings stood at approximately USD 227,000 per day as of March 20, reflecting a fundamental restructuring of crude trade flows, with most cargoes now loading from Yanbu, Fujairah, and Mina al Fahal as the interior of the Arabian Gulf remains effectively closed to mainstream owners. The Aframax market was the standout performer, with earnings on the UKC cross-trade up 55% week-on-week to approximately USD 237,000 per day, driven by the US 60-day Jones Act waiver pulling tonnage toward domestic SPR deliveries and refinery supply on both coasts. Suezmax markets also strengthened due to accelerated US crude exports. The sustainability of current earnings remains contingent on the conflict trajectory and whether alternative export channels can absorb a sufficient share of displaced Gulf volumes.

LPG/VLGC: USG rates jump sharply on a shortage of westward-repositioning tonnage
Houston-Chiba VLGC earnings rose 52% week-on-week to approximately USD 73,500 per day. The driver is a shortage of available vessels in the West rather than a demand surge, as owners and charterers continue to hold MEG-positioned tonnage for requirements still on paper, and a mass repositioning to the USG has yet to materialise. Sentiment remains cautiously bullish, though the pace at which vessels eventually reroute westward will be the key determinant of whether current levels hold into April.

PCTC: Timecharter rates steady at + USD 50,000 per day as segment bypasses Hormuz disruption
1-year time charter rates for modern car carrier tonnage held at low USD 50,000 per day, underpinned by limited fleet availability and continued global automotive export demand. The PCTC segment remains largely insulated from the Hormuz closure, as the Middle East functions primarily as a vehicle import hub rather than an export origin. Elevated bunker costs and broader macroeconomic uncertainty pose the main downside risks to the forward rate outlook, though the tight underlying fleet supply should moderate any correction.

Geopolitics: Tentative diplomatic pause emerges as infrastructure damage and supply disruption widen
President Trump’s announcement postponing attacks on Iranian energy infrastructure for five days provided the first signal of potential diplomatic engagement, triggering sharp volatility in crude. Brent fell to approximately USD 101 per barrel before recovering as Iran disputed the existence of negotiations. Even a swift ceasefire would not resolve the disruption quickly, with estimates suggesting up to two months needed to normalise logistics assuming no further infrastructure damage. Saudi crude exports from Yanbu have reached approximately 4 million barrels per day and the IEA’s strategic stock release has commenced in Asia, though these measures address only a fraction of typical Hormuz flows. Iranian strikes at Ras Laffan damaged approximately 12.5 mtpa of Qatari LNG liquefaction capacity with repairs expected to take three to five years, while Ukraine drone strikes on Russia’s Primorsk Baltic terminal further tightened Atlantic crude availability this week.