Fleet supply and freight rates drive crude tanker values higher
CRUDE tanker asset prices have been rising in recent weeks, lifted by a surge in freight rates and tightening vessel availability across global markets, while product tanker values remain strong.
The Baltic very large crude carrier time charter equivalent daily rate hit $118,321 in late November, its highest level since April 2020.
Meanwhile, the Baltic suezmax TCE peaked at $94,299 per day on November 18, the strongest level in some three years.
“A recent increase in crude oil tanker asset prices can be attributed to a sharp rise in freight rates,” said Xclusiv Shipbrokers analyst Eirini Diamantara.
“Another factor in pushing up asset prices is that many shadow-fleet vessels are tied up in long, inefficient trades or floating storage, which is further reducing the effective supply of compliant tankers,” Diamantara told Lloyd’s List.
Average values of 10-year-old VLCCs have now reached $88m while five-year-old ships are currently around $118m, up by around 4% since the summer. However, 15-year-old ships have risen further and are up by around 8% since August.
With the crude tanker freight markets being so strong, most shipowners are holding on to their ships, and relatively few VLCCs or suezmaxes are being circulated for sale.
“China has been buying more crude, especially long-haul barrels, which increases tonne-mile demand and keeps ships busy for longer periods,” noted Diamantara.
“With fewer available vessels and more long-distance cargoes to move, freight rates have stayed very strong. As earnings rise, buyers are willing to pay more for secondhand ships, and this has driven crude tanker values up in the recent period.”
Recently reported VLCC sales included the 2011-built sister vessels Mercury Hope (IMO: 9395290) and Mermaid Hope (IMO: 9395496), which were sold by Cido Shipping. Built in Japan by Universal Shipbuilding, they were purchased by undisclosed buyers for $60m each.
Meanwhile, the VLCC Alraya (IMO: 9320831), which was built by Japan’s IHI in 2005, is said to have been sold to Chinese buyers for $45m.
In the suezmax segment, Switzerland-headquartered Advantage Tankers is reported to have sold the 2010-built Advantage Summer (IMO: 9419890) to undisclosed buyers for $40.4m.
Looking ahead, the global crude tanker market is shaping up for a tight first quarter in 2026, with underlying fundamentals pointing to firm utilisation across the larger vessel classes.
While headline fleet numbers continue to rise due to an influx of newbuildings, a growing portion of VLCCs and suezmaxes is engaged in sanctioned or shadow-fleet trades.
These vessels are effectively removed from mainstream commercial activity, leaving the compliant fleet significantly smaller than raw tonnage figures suggest. As a result, real supply in the spot market remains constrained.
“A growing share of the fleet is trading shadow-fleet activity, effectively removing compliant VLCCs and suezmaxes from the mainstream spot market. This keeps real supply much tighter than fleet figures imply,” said Diamantara.
On the demand side, the oil market is expected to enter 2026 with a substantial production surplus. Such conditions could push crude prices lower, incentivising floating storage, inventory replenishment and increased long-haul crude buying by refiners looking to capitalise on cheaper barrels.
Trade patterns are also shifting in ways that boost tonne-mile demand. The continued replacement of Russian crude with longer-distance shipments from the US Gulf Coast and the Middle East is extending average voyage lengths and absorbing more tanker capacity.
Altogether, these dynamics point to a firm start to the year for crude carriers, especially VLCCs and suezmaxes, as tight effective supply and robust transport demand converge in early 2026, which in turn should support vessel values, noted Diamantara.
For product tankers, the outlook appears softer. Fleet growth is expected to accelerate, with deliveries reaching multi-year highs, while demand growth remains modest.
“Sailing distances could shorten if Suez and Red Sea routings normalise, reducing tonne-mile requirements,” said Diamantara.
With supply likely to outpace demand, product tanker fundamentals in 1Q26 are expected to be rather weaker than those in the crude sector.
The medium range product tanker segment dominated the secondhand market in November with 31 deals being concluded, representing nearly half of all sales during last month.
This trend is due to refinery realignment resulting in increasing export volumes from the Middle East and India, and subsequently elongated tonne-mile patterns, which collectively enhance the sector’s attractiveness to secondhand vessel buyers.
Recent MR tanker sales included the 2015-built, scrubber-fitted, LVM Warrior (IMO: 9694189). The 50,000 dwt ship was sold by Chinese owners to undisclosed buyers for circa $33m.
Meanwhile, Italy’s d’Amico is reported to have sold the 47,000 dwt MR tanker Glenda Meryl (IMO: 9494670) for $19.5m to undisclosed buyers. The 2011-built, ice-class vessel was sold with special surveys due.
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