As ceasefire extension momentum builds, freight rates ease from recent highs

Tanker: Earnings soften across all classes as ceasefire optimism weighs on sentiment
The crude tanker market eased across all three classes in the week ending 29 May, with VLCC earnings falling below USD 100,000 per day for the first time in 19 weeks as activity slowed during Posidonia week and US-Iran ceasefire talks advanced. The correction reflects a pullback from recent record highs rather than a fundamental shift in market conditions.

According to Clarksons, only three laden VLCCs transited the Strait of Hormuz during the week, leaving owners repositioning vessels into a quieter market. Suezmax and Aframax declined more sharply, particularly in the Atlantic Basin, where vessel supply increased faster than demand and charterers gained the upper hand. Markets are increasingly pricing in a possible reopening of the Strait of Hormuz; any breakdown in talks would extend the vessel shortages that have supported freight markets throughout 2026.

VLGC/LPG: Record spot rates pull back as arbitrage narrows
VLGC spot earnings fell from record highs to a still exceptionally strong approximately USD 170,000 per day on the Houston-Chiba route, as a narrowing Western arbitrage reduced buying interest. Owners and charterers remain split on direction: owners point to a balanced position list with only a handful of end-June and early-July ships available, arguing rates should remain supported, while charterers argue current levels are difficult to justify commercially. The outcome of ceasefire talks will be decisive; a Strait of Hormuz reopening would quickly bring back Middle East volumes and remove a key driver of current rates.

PCTC: Time-charter rates rise furhter as fleet tightens and Chinese export demand holds firm
Six-to-twelve-month time-charter rates for modern car carriers rose by almost 20% week-on-week to approximately USD 65,000 per day this week, supported by strong Chinese vehicle exports and tightening fleet availability. The segment remains largely insulated from Strait of Hormuz disruption, as the Middle East is primarily a vehicle import region rather than an export hub. Deliveries are concentrated in 2027 and beyond, leaving near-term vessel supply tight; the main downside risk is tariff escalation targeting Chinese-manufactured vehicles in key import markets.

Geopolitics: Ceasefire agreed in principle, Strait of Hormuz still closed pending approval
According to Reuters, the US and Iran reached an agreement in principle to extend their ceasefire and lift restrictions on shipping through the Strait of Hormuz, though formal approval has not yet been granted and Iranian state media said the deal is not finalised. Transit volumes remain around 95% below normal levels, meaning disruption to global energy flows continues largely unchanged. Brent crude fell about 10% over the week to close near USD 92 per barrel on ceasefire optimism, reflecting how sensitive oil and freight markets remain to diplomatic signals. A confirmed agreement would trigger rapid rebalancing across tanker, LPG, and product markets, while a breakdown in talks would maintain the current level of disruption and exceptionally high shipping earnings seen throughout 2026.