During the 2026 Strait of Hormuz crisis, Very Large Crude Carrier (VLCC) freight rates famously defied gravity by skyrocketing to historic peaks of $400,000 to $500,000 per day—and later stabilizing at an elevated $80000 to $120000 per day—even though seaborne oil volumes out of the Middle East Gulf plummeted by 36%.According to global maritime experts at Lloyd’s Register and Signal Ocean, this counterintuitive phenomenon of “fewer barrels, stronger earnings” was driven by a radical structural shift in global trade routes, fleet distribution, and massive risk premiums.
As the narrow waterway closed and cut off roughly 10 million barrels per day of Middle Eastern crude, import-dependent nations in Asia had to aggressively source replacement oil from alternative regions.Tankers shifted heavily to Atlantic-to-Pacific routes, notably hauling oil from the US Gulf, Brazil, and West Africa to Asia.
Atlantic-to-Pacific voyages jumped from 22% to 35% of all global VLCC export volumes. Because these journeys take significantly longer, they absorb vast amounts of global vessel capacity (higher tonne-mile demand), driving freight rates upward despite fewer total barrels being moved.
When the conflict froze traffic, approximately 247 large vessels (representing 6% of global tanker deadweight capacity) became instantly stranded inside the Middle East Gulf.
When expanding tracking to the wider Middle East, up to 984 tankers (22% of the global fleet) were effectively locked in or neutralized from the prompt global supply, severely starving the rest of the world of immediate tonnege.
Marine insurers priced the physical danger of the conflict directly into voyage costs. War risk insurance premiums for a single VLCC transit exploded from a pre-war baseline of $300,000 to a peak of $4 million per voyage, before later settling near $1.5 million.
Panic-buying by refiners who faced dangerously low inventories forced charterers to book any available un-trapped vessel regardless of the astronomical spot market costs to secure energy security.
Because global supply lines were forced to readjust over months, the value of active, readily available vessels broke normal economic depreciation curves.
Ship buyers willingly paid a $45.5 million premium for immediate resale contracts over standard shipyard newbuild prices just to bypass the 18-to-24-month construction waiting period. This pushed the valuation of a 5-year-old operational VLCC well above the price of a brand-new ordered asset.
Note by Alessandro Bazzoni