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A surge in shipping rates drives the second-hand prices of crude tankers

04 Nov 2025

VLCC freight rates surged over $100,000pd, following the rise in OPEC+ output and a sharp rebound in tanker demand, which drove second-hand values to a new peak in October. This uptick is likely to continue in 4Q25 amid tight tonnage supply and the onset of seasonal winter demand. The vessel supply is so acute that even 10-year-old VLCCs are fetching prices close to their original newbuilding levels. In contrast, Suezmax and Aframax values remained stable through 3Q25 and could surpass their previous highs in 4Q25. This will be supported by tightening VLCC availability, aiding the demand for their counterparts.

2025: The year of VLCCs

VLCC owners have been minting money in this profitable market, surpassing last year’s already elevated rates. This uptick can be attributed to a surge in stocking activity, underpinned by rising OPEC+ supply and lower vessel supply. Moreover, mounting sanctions have further constrained effective tonnage, tightening supply and amplifying the rally.

VLCC earnings have reached new highs, with rates expected to stay firm through 4Q25, supporting second-hand values. By October, VLCC second-hand prices across all age ranges climbed to an all-time peak, surpassing last year’s record. Older units, particularly those over 15 years, have recorded the highest gains, rising by around $5 million since the start of the year.

Suezmax: The second-best bet

With a tight supply of VLCCs, the Suezmax segment has emerged as the second-best option in the market. A flurry of new deliveries this year has provided some flexibility in the fleet, allowing Suezmaxes to capture growing demand as charterers seek alternatives to costly VLCCs. Increasing crude flows from Kazakhstan to Asia have further boosted employment opportunities for vessels, especially as sanctions continue to redirect traditional trade routes.

Strong demand across the East of Suez has boosted Suezmax earnings, with Middle East–West Coast India rates exceeding $85,000pd. The booming market has also spurred a surge in second-hand activity across all size classes since September; gathering further momentum in October. This signals that the strength in larger segments is now cascading down to smaller counterparts such as the Aframax fleet.

Figure 1: Secondhand prices of a five-year-old VLCC reached a new high

Source: Drewry Maritime Research

Figure 2: Second-hand activity surged to a one-year high

Source: Drewry Maritime Research

Earnings and asset prices to stay elevated as China stockpiles

The strength in crude tanker earnings and asset values is expected to continue until 1Q26, supported by growing global oil supply. As OPEC+ phases out its production cuts, a temporary oversupply is likely to stimulate further inventory build-up, particularly among cost-sensitive buyers.

China continues to lead this trend, aggressively importing crude to replenish its reserves, while OECD countries are also rebuilding inventories. This ongoing restocking cycle will keep freight demand robust, especially for larger vessels such as VLCCs and Suezmaxes. With asset values closely mirroring earnings, tighter US sanctions on Russian crude are likely to lend additional support to both modern and vintage second-hand prices.

While Suezmax gains may moderate with several new deliveries in 2026, the VLCC segment is expected to maintain its dominance. With only 34 VLCCs scheduled to join the fleet next year, far short of meeting projected demand, the scarcity of large tonnage will continue to strengthen freight rates and boost asset prices.

However, potential headwinds remain in 2026. The oil market is likely to be oversupplied, but any renewed production restraint from OPEC+, whose members have retained flexibility over output adjustments, could temper this surplus, limiting further rate gains. Likewise, a possible contraction in Russian crude production and exports due to mounting sanctions on major producers is likely to curb trade volumes, reducing tonne-mile demand and capping the upward momentum in freight and asset prices.