VLCC Rates Retreat from Record Highs as Demand Softens
Freight rates for VLCCs from the Gulf of Oman to China dropped to around 776 points from 841, driven by weakening demand and the potential easing of shadow fleet sanctions.
Freight rates for Very Large Crude Carriers (VLCCs) on the Gulf of Oman to China route dropped to around 776 Worldscale points from 841 points in the previous week, according to Baltic Exchange data.
Rates on the West Africa to Asia route are also retreating from their previous record peaks.
Matthew Wright of Kpler said demand on the route has "declined since the recent attacks."
For his part, Michael Ryan from Sparta Commodities attributed part of the decline to comments from the US administration regarding the potential lifting of sanctions on certain tankers in the so-called shadow fleet.
What do these terms mean?
Worldscale Point: A global benchmark for pricing oil freight, expressed as a point relative to a fixed baseline rate for each route, facilitating rate comparisons across markets.
Very Large Crude Carriers (VLCC): The largest crude oil transport vessels, carrying about two million barrels per voyage.
Shadow Fleet: Tankers operating largely outside standard insurance and documentation systems to transport sanctioned oil.
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