VLCC earnings have surged to their highest level in two and a half years, averaging USD 94,267 per day last week, a 14% week-on-week increase according to Clarksons. On the benchmark AG-China route, rates touched USD 100,000 per day, supported by limited fleet growth, increased OPEC+ output, and sanctions that have sidelined a significant share of the fleet. The VLCC market serves as a benchmark for overall crude tanker conditions, and the sharp gains are providing positive spillover into Suezmax and Aframax segments, which benefit from both cannibalisation across vessel classes and their greater flexibility in serving a range of trade routes.

Favourable fundamentals well into winter
Trade flows are shifting, with more crude moving from the Atlantic to the Pacific Basin and Middle East producers restoring volumes. Sanctions have compounded the tightening, with a significant part of the crude fleet now restricted, while new US regulations have forced Chinese-owned vessels to reposition, creating further inefficiencies.

Sentiment among owners and analysts is increasingly bullish, with expectations of a strong winter market and even a multi-year rally. For EMF, this translates into supportive fundamentals for Suezmax and Aframax earnings and a constructive outlook heading into the winter season.