VLCC Rates Hit Record $1.27 Million a Day as Oman Capacity Tightens
Saudi Arabia’s rerouting of crude through the Strait of Hormuz has increased tanker demand and pushed ship-to-ship transfers near Sohar toward capacity limits.
Very large crude carrier (VLCC) rates for Middle East oil shipments to China reached a record $1.27 million per day on Sept. 21, as Saudi Arabia rerouted crude through the Strait of Hormuz and transfers off Oman neared capacity limits.
Saudi crude exports through Hormuz are on track to average 3.6 million barrels per day in September, compared with about 900,000 barrels per day in August. The rerouting has increased tanker demand, with estimates indicating that 36 to 40 additional VLCCs are needed to handle the higher flows.
Saudi Arabia sold more than 60 million barrels of crude for ship-to-ship transfers near Sohar, Oman, covering September and October shipments. The number of VLCCs needed to move the same volume rose to 40 in September from 24 in August.
The shift followed a Sept. 13 attack that disrupted Saudi export flows through the East-West pipeline and slowed shipments from Yanbu on the Red Sea. Saudi Arabia historically used the pipeline to bypass Hormuz, while the revised route sends more crude through the strait before transfers from smaller vessels to VLCCs near Oman.
