Year in Review

Year in Review

It has been another year for the books in the tanker markets, with almost too many events to recap. We covered the first half of the year in our earlier report titled “All about US”. In this report we will limit our focus to recapping some of the key developments of the second half of the year. The latter half of the year certainly had its fair share of geopolitical turmoil, but for the tanker markets it will be remembered for the sky-high dirty freight rates achieved especially in Q4. Clean markets have been healthy, though nowhere near as strong, and weaker compared to a 2023 and 2024.

The war continues

The Ukraine war remained at the top of the agenda in the latter half of the year. On the 19th of July, the EU published its 18th sanctions package against Russia, sanctioning over 100 vessels and lowering the crude price cap from $60 to $47.6, curtailing access of mainstream tankers to Russian markets. It also announced a ban on EU imports of products refined from Russian oil beginning on the 21st of January, which was subsequently detailed further in the 19th package. Turkish refineries have since dialled down imports of Russian crude. India, also an exporter of products refined from Russian crude to the EU, saw Nayara Energy designated, which runs the Vadinar refinery.

India remained a political target and in August Trump imposed a 50% tariff to punish the country for its continued imports of Russian crude. A meeting between Putin and Trump also took place in August, in a fresh attempt to negotiate peace in Ukraine, though seemingly little progress was made. Russia’s crude exports to India remained largely resilient, and any drop was partially absorbed by China. In the meantime, Ukrainian drones continued to strike Russian energy infrastructure. Russian CPP exports from western terminals declined into Q4, with multiple refinery outages contributing, though increased seasonal domestic demand also played a role. Inversely, Russian crude exports from western terminals rose.

October saw the designation of Rosneft and Lukoil by OFAC, as well as the release of the 19th sanctions package by the EU, sanctioning Chinese refineries as well as a host of vessels. The former designation in particular caused havoc in the tanker markets, with multiple Chinese and Indian refineries seeking additional non-Russian supplies. Mainstream suppliers from the Middle East, Africa, US, and Latin America stepped in, boosting tonne miles and benefitting the larger crude tankers. With sanctions on Iran also intensifying and OPEC+ supply increasing, crude and DPP volumes on the water rose to levels not seen since the pandemic and crude tanker freight rates skyrocketed, particularly for VLCCs.

In December, another strong push for peace was made, and negotiations are still ongoing. Still, as before, the path to peace remains uncertain and it is unclear to what extent trading relationships can revert to pre-war patterns. The news also recently emerged that the G7 group of countries are considering removing the oil price cap, first implemented at the end of 2022. The removal of the cap would see a full and unconditional ban on G7/EU companies providing maritime services to support Russian oil trade, in effect pushing Russian business entirely to the shadow fleet.

Trump turmoil

Another overarching theme of the second half of the year was continued turmoil introduced by the Trump administration. After the United States Trade Representative (USTR) published their action plan to address alleged Chinese maritime dominance in April, few details emerged on the port fees until much closer to the implementation date. The port fee saga came to a head in October, when fees were imposed for making port calls in the US based on whether a vessel is Chinese built or Chinese owned or operated. China retaliated with little preamble by introducing their own, much more impactful port fees, massively restricting trade for any non-Chinese built ships with clear US links calling at Chinese ports. With VLCCs most impacted, the Chinese port fees tightened vessel supply, supporting freight rates. This situation was short lived, however, as a meeting between President Trump and President Xi in late October resulted in all port fees being paused for at least a year.

Elsewhere, the Trump administration’s maximum pressure campaign on Iran continued in the latter half of the year, with various OFAC sanctions implemented. Perhaps the most impactful was the designation of the Rizhao oil terminal, which accounts for around 10% of China’s total crude imports. This resulted in further volatility in freight rates, again most significantly affecting VLCCs.

Towards the end of the year, the US ratcheted up pressure on Venezuela, seizing a sanctioned VLCC and imposing a de facto embargo on the country’s oil exports. Venezuelan crude/DPP exports have averaged 900kbd in 2025, of which 140kbd went to the US, with most of the balance likely to have ended up in China or blended into the SE Asian market.

Decarbonisation delayed

This April, the IMO Net Zero Framework was established at the 83rd session of the International Maritime Organization’s (IMO) Marine Environment Protection Committee, also known as MEPC83. However, in October, after strong US opposition the final vote was delayed by twelve months. As a result, the industry is now facing an increased level of uncertainty – it is unlikely that the framework will be adopted in its current form next year.

Red Sea

The second half of the year saw an increase in clean and crude tanker trade through the Red Sea, though volumes remain significantly below 2023 levels. Consequently, LR2s especially have seen reduced demand in 2025, with clean cargoes on VLCCs and Suezmaxes continuing at varying levels throughout the year. A less substantial impact was felt on crude tankers, with other factors far more relevant.

This development came despite renewed Houthi attacks on commercial shipping in both July and September. The ceasefire deal between Hamas and Israel reached in October led to an official announcement by the Houthis in November to pause attacks on commercial shipping for as long as the ceasefire lasts. Since then, major shipping companies have announced their intention to trial a return to the Red Sea, potentially paving the way for a full normalisation of Red Sea and Suez Canal trade.

MidEast Gulf*/India to Europe Clean Trade (kbd)

*excl. West Coast Saudi Arabia

Oil glut

A story that has attracted attention in 2025 was the possibility of an impending oil glut. Barring several geopolitical crises, oil prices have been declining steadily throughout the year, currently looking to end 2025 around $15/bbl lower than they started. OPEC+ continued to unwind cuts into the second half of the year, finalising the return of barrels cut in January 2024 in October. A further 400kbd of the January 2023 cuts are to be unwound by the end of the year. Most of these cuts were not seen in increased exports until domestic demand in the Middle East declined seasonally at the end of summer. This, coinciding with refinery maintenance freed up significant volumes for export at the end of Q3 and going into Q4, increasing crude tanker utilisation and boosting freight rates substantially. Supply additions also came online in Latin America, with Guyana, Brazil, and Argentina increasing production, and US production reached record levels in 2025.

Consequently, we’ve seen the highest VLCC freight rates since the pandemic. Average earnings on VLCCs for 2025 are expected to reach the highest level seen in over a decade, with Suezmax and Aframax earnings also at strong levels.

Refining runs

Whereas crude oil supply was anything but tight in the second half of 2025, clean products saw tightness reflected in very high margins. Several notable outages plagued the market, with the Dangote and Al Zour refineries running into problems, to name a few. Several refinery closures in the West especially in the first half of the year, limited spare capacity. Despite this, refining runs reached a record high in the summer and could post a new record this month. The targeting of Russian refining infrastructure impacted upon supply, and consequent rerouting of especially gasoil and naphtha bolstered clean tanker markets.

Fleet development

On the supply side, newbuilding orders slowed significantly this year, an acceleration in the second half of the year notwithstanding. Over the first 11 months of the year, 2025 saw 231 orders of crude and product tankers over 25k dwt, compared to 513 over the same period in 2024. Suezmaxes are the exception to the general trend, however, with orders increasing significantly in 2025 so far. Deliveries on the other hand, increased substantially this year, with 190 deliveries in 2025 so far compared to 70 in 2024 over the same period. Despite increased deliveries, the average fleet age increased in 2025.

The sanctioned fleet has grown over the year, as more ships in the Iranian, Venezuelan, and especially the Russian fleets were designated and purchases of older tankers into the dark fleet continued, albeit at lower levels.

Asset prices were mixed, with second hand values in general declining as newbuild prices remained steady. Perhaps not surprisingly, overall VLCCs had the best year, with both newbuild and second hand values mostly stable.

Crude Oil

East

The AG VLCC market ended last week quietly, with most third-decade business largely completed and with freight levels holding steady. Early this week, enquiry remained limited as participants waited for Saudi stem dates to be confirmed. During this period, the availability of tonnage improved, giving charterers some hope of securing cover at more competitive levels ahead of the Christmas holidays. Following confirmation of Saudi dates, activity remained subdued on the surface, although rumblings of under-the-radar fixing emerged as the week progressed. Freight levels hovered in the balance, with the healthier tonnage list offering charterers more leverage if they decide to step out. By the end of the week, enquiries had picked up as charterers focused on covering first-decade positions, with rates taking a softer tone compared to earlier levels, and a few deals failed due to higher rates.

The Suezmax market in the East has struggled this week with rates slipping away. Though with that said, the firmness in the West is likely to tempt a few more ballasters to keep the tonnage list down. Basrah/West today is around 140 x ws 72.5 via C/C but with more compromised ships opening up those who can take them will likely be able to chip away a tiny bit. Enquiry for cargoes heading East has begun to fall away slightly but for a modern approved ship it seems likely Owners will be pushing for 130 x ws 140.

In Asian Aframaxes, the limited end-December cargoes appear to have been primarily fixed privately, at levels below last done, while enquiry for January has yet to gather momentum. The TMX-East market remains quiet for the start of next year loading window, limiting deployment options especially for tonnage opening far east end of this year. Fresh requirements are expected to stay subdued next week due to the upcoming Christmas holidays. With available tonnage gradually accumulating, rates continue to face downward pressure. Our assessments currently stand at WS150-152.5 for Indo-up run and WS147.5-150 for TD14.

West Africa

The WAF VLCC market remained subdued throughout the week, with little visible activity and most cargoes either staying within the Suezmax bracket or being worked quietly under the radar. Enquiry was limited, and freight levels largely hovered around last-done numbers, though a lack of clear testing made it difficult to pinpoint true market levels. As the week progressed, sentiment softened further in line with surrounding regions. Rates came under gradual downward pressure, and with limited VLCC-sized demand emerging, owners found themselves in a less comfortable position. Even if a fresh test is still required to identify where the market may ultimately find its floor.

The West African Suezmax market has really firmed up in the latter half of the week, and with Owners having the bit firmly in their teeth, expect Owners next week to be looking to push beyond 130 x ws 150 for TD20. The premium to head East today is around 7.5 points with a weaker market in the East, those fixing far enough ahead may even be able to squeeze a touch less.

Mediterranean

TD6 has firmed slightly to 135 x ws 165, and with further improvement in West Africa expect things to move further next week. The program for January is reported to be heavily Suezmax focused, which has owners feeling excited. Libya/Ningbo has seen another week with minimal enquiry, with most expecting the next done to be in the new year. As brokers, we think to fix today charterers will be looking at a touch over $6m.

The Mediterranean and Black Sea Aframax markets began the week in a strong place as charterers had rushed to cover remaining December requirements, having driven rates higher on the back of tight availability and solid pre‑Christmas demand. However, as the week got going, momentum tapered off with most December stems now accounted for, and attention shifting toward a still quiet January program. This picture is further echoed by the news that there will be no Aframax sized CPC cargoes in January…  A short XMed run slipped from ws235 to ws230, good Ceyhan and Libya stems were concluded at ws205 but we expect to see ws200 on the cards before too long. So, it looks as good as it gets now for owners, leaving them holding out hopes that replacement cargoes or weather delays might reheat sentiment just prior the Christmas break. 

US Gulf/Latin America

The Americas VLCC market experienced a quieter spell overall, with limited fresh enquiry reported through most of the week. While the USG itself remained subdued, the Brazil export market provided the bulk of activity, offering a steadier flow of cargoes and helping to keep engagement levels from dropping further. Tonnage availability remained relatively balanced, which initially helped rates hold steady. However, as the week progressed and enquiry failed to build, freight levels in the USG began to ease, marking a clear softening compared with the previous week’s stability. Owner sentiment cooled slightly as momentum faded, and with limited visible demand, the market lacked support to prevent rates from drifting lower. Attention now turns to whether renewed enquiry emerges in the coming days to stabilise levels and restore confidence.

North Sea

As the year draws to a thankful close, we finish as we started off with slight but stable Aframax movement. Despite neighbouring volatility, the North Sea stands resilient to change a stalwart of stability with gradual change of just a couple of points with swings left to other regions. Levels sit in the high ws150s with a couple of days fixing before Christmas likely to have little impact on where we go into the New Year. We are expecting some bad weather in the North Atlantic and North Sea over the festive period so some last-minute replacements could add a touch of spice to things.

Crude Tanker Spot Rates (WS)

Clean Products

East

The LR2s have picked up in activity as the week has progressed and although busier the sentiment feels flat with TC1 at 75 x ws150 and West at circa $3.9m (via Cape). LR1s have been chipping away behind the scenes and although we have seen a slight dip in rates, TC5 is at 55 x ws170 and West at $3.3m levels. The list has tightened up and now has the potential to see the rates positively correct. That said, with Christmas next week, expect to see charterers try to whip out ships as owners look to take coverage prior to the holidays.

The market strengthened this week driven by a tight tonnage list and sustained enquiry around the Christmas window. Early gains saw TC17 move from 35 x ws240 into the mid-240s, with repeated fixtures confirming firm underlying support. A late surge of fresh enquiry on Wednesday pushed rates further, with 35 x ws250 achieved, while TC12 also showed improvement. Heading into the weekend, the market became increasingly date dependent: rates steadied at 35 x ws245–250 for prompt positions, but vessels covering Christmas dates could command a premium.

UK Continent

A little more activity to close out the week on MRs so any further reduction in rates is now looking a little unlikely, as the focus will likely be booking ships with safe itineraries. In general, most would feel this has not been the end to the year they were expecting, as the weather delays and volume moving has just not materialised in last 3-4 weeks. There is a huge expectation for Q1 and we feel that when there are big national holidays the mood of the market is amplified by the break. At this point rates are feeling pretty stable, but owners real interest is the long haul so we expect some volatility on the short haul rates over the festive period. 

The Handy sector turned into a bit of a damp squib as we come to the final full week of trading of the year, mainly due to the uninspiring MR sector choking any enthusiasm. Enquiry levels have been slow and with the larger tonnage taking a dive, MR rates have become competitive giving charterers a larger pool to pick out of. With “working days” limited till 2026 now, owners are hopeful that charterers will be content with current levels. A firm itinerary should now become a key selling point with all eyes on how much bounce this market has early next year. 

Med 

Despite a relatively active Monday for MRs, emblematic of a pre-Christmas rush, the volume for MRs in the Med recently has not been there and for majority of the week any business that was done seemed to go direct. Rates have teetered around the ws135-140 level with the latter being last done ex Sines. The weather strains did not have nearly as big an impact here compared to the Handies and the list has remained a mixed bag throughout, which seemed to have rein(deer)ed in owners’ ambitions. Med-WAF has seen a minimal pick up, but the differential requires a fresh test with the barrel flow just not there currently. With the North also seeing downward corrections and a lack of enquiry down to WAF any business that might get done will be in line with the dynamics of a healthier list so the potential for a downward correction is there.

In all it has been an active week for Med Handies which was to be expected given the festive period time constraint. We started strong with lots of enquiry as both parties looked to secure and finalise business which saw ws185 repeated but it did not take long for owners to mount a push on rates due given how tight the list has been from start to finish this week and the weather stressing itineraries. These factors created the optimal scenario for owners with firm itineraries being worth their weight in gold, frankincense, and myrrh and thus we now sit at 30xws245 with rumours of ws250 having been repeated with grade sensitivity yielding five points more. Going into what will be a disjointed week it seems there is an element of acceptance regarding fixing levels, and it is expected to remain around here pending a healthy restock.

Clean Tanker Spot Rates (WS)

Dirty Products

Handy

Handy rates in the UKC somewhat softened over the course of the week, while the decline in Handy rates in the Mediterranean was noticeably more pronounced.

MR

MRs, by contrast, remained broadly flat both in the UKC and the Med market.

Panamax

As is often the case in this market, there is little to report.

Dirty Product Tanker Spot Rates (WS)

Rates & Bunkers

Clean and Dirty Tanker Spot Market Developments – Spot WS and $/day TCE (a)

	wk on wk change	Dec 18th	Dec 11th	Last Month*	FFA Q4
TD3C VLCC AG-China WS	-9	115	123	134	113
TD3C VLCC AG-China TCE $/day	-10,250	115,000	125,250	136,750	108,750
TD20 Suezmax WAF-UKC WS	11	143	133	156	138
TD20 Suezmax WAF-UKC TCE $/day	7,750	71,000	63,250	77,750	65,500
TD25 Aframax USG-UKC WS	5	207	202	203	198
TD25 Aframax USG-UKC TCE $/day	2,750	59,250	56,500	56,000	52,250
TC1 LR2 AG-Japan WS	-9	150	159	151
TC1 LR2 AG-Japan TCE $/day	-2,750	39,000	41,750	38,000
TC18 MR USG-Brazil WS	-21	209	230	228	226
TC18 MR USG-Brazil TCE $/day	-3,250	29,250	32,500	32,000	31,000
TC5 LR1 AG-Japan WS	-13	167	181	150	152
TC5 LR1 AG-Japan TCE $/day	-3,250	31,250	34,500	26,750	25,500
TC7 MR Singapore-EC Aus WS	-12	230	242	201	204
TC7 MR Singapore-EC Aus TCE $/day	-2,000	30,000	32,000	24,000	24,750

(a) based on round voyage economics at ‘market’ speed, eco, non-scrubber basis

Bunker Prices ($/tonne)

	wk on wk change	Dec 18th	Dec 11th	Last Month*
Rotterdam VLSFO	-21	386	407	415
Fujairah VLSFO	-18	414	432	448
Singapore VLSFO	-14	423	437	451
Rotterdam LSMGO	-66	581	647	738

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