By Roslan Khasawneh – SINGAPORE, March 16 (Reuters) – A surge in demand to ship the flood of crude oil unleashed by Saudi Arabia and its OPEC peers is sending freight rates surging and forcing buyers to seek out space on smaller tankers after the largest ones have been booked out, shipping sources said.
Freight charges to ship oil in Suezmax tankers, which can hold about 1 million barrels, have in some cased increased ten-fold amid a shortage of very large crude carriers (VLCCs) which are capable of carrying as much as 2 million barrels of oil, the sources said.
“Bahri has wiped out the VLCC population for march lifting in less than a week which is why people are having to break up their loadings into Suezmax’s,” said Ashok Sharma, managing director of shipbroker BRS Baxi in Singapore.
Saudi Arabia’s National Shipping firm, Bahri, snatched up about 24 VLCCs since last week amid a bookings frenzy to ship crude oil to customers as it followed through on its promise to boost crude oil output in a price war with Russia and U.S. shale producers.
The cost of shipping crude oil on a Suezmax from the Middle East Gulf to India jumped to about $200,000 per day by Friday, up from about $20,000 per day in the week before, according to shipbrokers.
VLCC rates from the Middle East to China rose to about $265,000 per day on Monday, up from about $30,000 a day last week, broker data showed.
VLCC tanker rates last surged in October last year in the aftermath of U.S. sanctions on units of Chinese shipping giant COSCO.
But a key difference between then and now is that the appetite to actually book ships at these near-record levels is high and supply is struggling to keep up with the demand, the shipping sources said.
The lack of available VLCC’s has also seen an unusual increase in the number of Suezmax tankers sailing to China with as many as 10 such tankers booked in the past few days, the broker sources said.
The bookings frenzy comes amid an increasingly gloomy global economic outlook and slowing fuel demand the coronavirus pandemic paralyses travel and supply chains.
“I have never seen a market rising on the back of a recession threatening,” said Sharma.
Earlier in March, the Organization of the Petroleum Exporting Countries and its allies, including Russia, – together known as OPEC+ – failed to reach an agreement for deeper production cuts to support prices hit by the coronavirus outbreak, sending global oil prices plunging and threatening to overwhelm global oil markets with supply.
(Reporting by Roslan Khasawneh, editing by Louise Heavens)
The European Commission is expected to propose a floating Russian oil price cap this week as part of a new draft sanctions package in an attempt to overcome opposition from some member states, four EU diplomats said.
(Bloomberg) — China disputed Germany’s accusation that one if its warships behaved dangerously toward a military aircraft in the Red Sea, an incident that Chancellor Friedrich Merz called “totally unacceptable.”...
Yemen's Houthis sank two cargo ships in the Red Sea this week, the first flare-up in seven months in the Iran-backed group's years-long campaign to choke global shipping in protest over the war in Gaza and the plight of the Palestinians.
July 10, 2025
Total Views: 580
Get The Industry’s Go-To News
Subscribe to gCaptain Daily and stay informed with the latest global maritime and offshore news
— just like 109,089 professionals
Secure Your Spot
on the gCaptain Crew
Stay informed with the latest maritime and offshore news, delivered daily straight to your inbox
— trusted by our 109,089 members
Your Gateway to the Maritime World!
Essential news coupled with the finest maritime content sourced from across the globe.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.