The risk of US-Iran conflict is compounded by "someone monopolizing 1/3 of the capacity," leading to a surge in global tanker rates to a six-year high

The global super-large crude oil tanker (VLCC) market is experiencing the most intense rate surge in six years. The dual impact of war risk premiums and an unprecedented wave of fleet mergers has driven freight rates to historic highs, beginning to influence physical crude oil prices and the entire tanker market.

On February 25, according to Bloomberg, Saudi National Shipping Company Bahri recently chartered five VLCCs at daily rates of up to $200,000, the highest level recorded by the Baltic Exchange in six years, with one DHT Jaguar transaction reaching a daily rate of $208,000.

Meanwhile, Polymarket data shows that market pricing for a US military strike on Iran before March 15 has risen to 47%, with the risk of the Strait of Hormuz blockade quickly being factored into freight rates and Brent crude futures, which remain above $70 per barrel.

Another major factor driving the rate surge cannot be ignored. According to a previous article by Wallstreetcn, Bloomberg cited several industry veterans, stating that South Korea’s Sinokor Group has rapidly acquired or leased a large number of ships over the past one or two months, currently controlling about 120 VLCCs, roughly one-third of the tradable VLCC fleet worldwide.

SFL Corp. CEO Ole Hjertaker directly stated, “In fact, one party or a group of collaborators controls about one-third of the available or trading VLCC fleet,” this highly concentrated market structure is reshaping the global oil tanker pricing mechanism.

War Premium: The Hormuz Risk Returns to Market Pricing

The report points out that the Strait of Hormuz has once again become the most sensitive geopolitical nerve in the global energy market.

According to CCTV News, on the evening of the 25th local time, Iranian Foreign Minister Amir Abdollahian led an Iranian delegation to Geneva, Switzerland, to participate in the third round of Iran-US negotiations scheduled for the 26th. Wallstreetcn noted that US President Trump recently admitted he is considering a “limited military strike” on Iran.

The report highlights that US-Iran tensions remain high, and market expectations of US military action are rapidly increasing, with war risk insurance premiums quickly factored into VLCC charter rates.

Polymarket’s probability pricing for “the US attacking Iran before March 15” has reached 47%, directly reflecting the market’s high alert for Hormuz Strait disruption risks.

Analysts believe that if Iran blocks the strait, the global energy market will face an immediate panic shock, and as the core carrier for Middle Eastern crude exports, VLCC rates will be the first to be affected.

Meanwhile, Brent crude futures also reflect this risk premium, maintaining above $70 per barrel in early Thursday trading. The combination of war risk and supply disruption expectations has led charterers to scramble for space, further pushing up spot freight rates.

Capacity Monopoly: Sinokor’s Aggressive Expansion Shakes Global Fleet Structure

Alongside geopolitical risks, an unprecedented VLCC merger wave led by a single buyer is underway.

According to Wallstreetcn, South Korea’s Sinokor Group has rapidly accumulated control of about 120 VLCCs over the past one or two months, including purchased, leased, and previously controlled ships.

This scale has led many industry veterans with decades of experience to state that they have never seen such a situation in their careers. Some estimate the actual number is below 120, but even at the low end, this acquisition spree has cost around $1.5 billion, with some participants believing the total could approach $3 billion.

The acquisitions mainly target older ships over 10 years old. In recent weeks, resale prices for these ships have continued to rise, boosting long-term leasing costs and allowing shipowners to convert asset appreciation into higher charter rates.

DHT Holdings CEO Svein Moxnes Harfjeld described this trend as a “fundamental shift” in global fleet ownership consolidation, noting that its impact has fully penetrated spot freight rates, period demand, and secondhand VLCC valuations—“this consolidation is changing pricing dynamics and putting pressure on the timely availability of vessels.”

Multiple fundamentals resonate, providing strong momentum for rate increases

Beyond geopolitical risks and market concentration, macro supply and demand patterns are also contributing.

Sparta Commodities senior analyst June Goh pointed out that several positive fundamental drivers are behind the VLCC rate increases:

The shift of Venezuelan crude from “dark ships” to compliant transportation, OPEC+ production increases bringing more Middle Eastern crude volumes, and Indian refinery demand shifting from Russian to Middle Eastern crude all significantly boost demand for compliant VLCC capacity.

According to Clarkson Research Services, crude oil tanker earnings have seen their strongest start in over 30 years. The benchmark daily earnings for VLCCs have surpassed $120,000, rising more than fourfold in the past month. Market turbulence has also affected physical oil prices, with traders noting that spot crude in some regions is under pressure due to shipping market chaos.

Goh also warned that spillover effects are spreading downstream:

“The Suezmax and Aframax markets will soon be affected by spillover from the dry bulk freight markets.”

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