Sanctions and geopolitical risk loomed large in November

November was one of the strongest months for crude tankers in half a decade. VLCC earnings climbed to their highest levels since 2020, consistently trading above the 100,000 dollar per day mark. Suezmaxes and Aframaxes followed the same firm trajectory. The strength was broad based, driven by a combination of tighter compliant tonnage, robust long-haul demand and a structural shortage of fleet growth.

Supply discipline and shifting trade flows have been the dominant drivers this month
OPEC+ confirmed a modest production increase of roughly 140,000 barrels per day for December while signalling a pause in further hikes in early 2026. Meanwhile, revised US data showed higher than expected crude output and export availability, reinforcing the Atlantic Basin’s importance as a key supplier for Asian and European refiners.

A major November trend was the surge in crude rerouting caused by sanctions and geopolitical risk
New US measures, targeting Russian oil majors Rosneft and Lukoil, prompted Indian refiners to scale back Russian purchases and replace volumes with crude from the US Gulf and Middle East. Refinery strikes, attacks on Novorossiysk, and temporary disruptions in the Black Sea added further friction to Russian flows. These trade shifts had a noticeable impact on VLCC and Suezmax segments, tightening tonnage and lengthening average voyage distances.

China’s intake strategy also shaped the month
Despite Iranian crude oil being sanctioned, China has consistently imported crude from Iran. For years Iranian flows have been trans-shipped off the coast of Malaysia and sold as Malaysian. Iranian flows remained elevated at more than 2.5 million barrels per day even after Malaysia closed its main ship-to-ship anchorage. In addition to transfers relocating offshore, China has started importing large quantities of crude from Indonesia.

Product carriers also felt the pull of the crude market
LR2s continued to migrate from clean to dirty trades as crude earnings remained more compelling. The high conversion rate, with more than 30 LR2s switching year to date, tightened clean supply in several regions and helped lift sentiment in the product market.

Floating storage buildup could pose a risk for long-term demand
Sanctions and uncertainty around Russian loadings have driven an increase in barrels held at sea, highlighting how quickly geopolitics can tighten vessel availability. While this supports rates in the short term, large and persistent offshore storage volumes could ultimately weaken the market if the crude returns to shore later for a concentrated period, potentially leading to temporary oversupply and reduced production. Taken together, these dynamics made November the most robust tanker month in five years. A restrained orderbook, solid long-haul demand and continued shifts in global crude sourcing have created an exceptionally strong market.