The global Very Large Crude Carrier (VLCC) market is experiencing its most significant rate surge in six years. A combination of war risk premiums and an unprecedented wave of fleet consolidation is driving freight costs to historic highs, with impacts spreading to physical crude oil prices and the broader tanker market.

On February 25, Bloomberg reported that Saudi Arabia’s national shipping company, Bahri, recently chartered five VLCCs at daily rates as high as $200,000—the highest level recorded by the Baltic Exchange in six years. One of the vessels, the DHT Jaguar, was contracted at $208,000 per day.

At the same time, data from Polymarket shows that market expectations of a U.S. military strike against Iran by March 15 have risen to 47%. The risk of a blockade in the Strait of Hormuz is being rapidly factored into freight rates and Brent crude futures, which remain above $70 per barrel.

Another key driver behind the soaring rates cannot be overlooked. According to a prior report, Bloomberg cited several industry veterans stating that South Korea’s Sinokor Group has aggressively purchased or leased a large number of vessels over the past one to two months, now controlling around 120 VLCCs—roughly one-third of the globally tradable VLCC fleet.

Ole Hjertaker, CEO of shipping company SFL Corp., stated plainly that "in effect, one party or a group of collaborators controls about a third of the available or trading VLCC fleet." This highly concentrated market structure is reshaping global tanker pricing mechanisms.

War Risk Premium: Hormuz Strait Concerns Return to Center Stage The Strait of Hormuz has once again become the most sensitive geopolitical nerve center for global energy markets.

Recent acknowledgments by U.S. President Donald Trump that he is considering a "limited military strike" against Iran have heightened market expectations of potential U.S. action. War risk insurance premiums are now quickly being incorporated into VLCC charter rates.

Polymarket’s probability assessment of a U.S. strike against Iran before March 15 has reached 47%, reflecting market vigilance over the risk of disruption in the Strait of Hormuz. Analysts suggest that if Iran were to block the strait, global energy markets would face immediate panic-driven shocks, with VLCC rates—being the primary means of transporting Middle Eastern crude—bearing the initial impact.

Meanwhile, Brent crude futures continue to reflect this risk premium, trading above $70 per barrel in early Thursday trading. The combination of war risk and supply disruption fears is prompting charterers to secure vessel space aggressively, further driving up spot freight rates.

Fleet Consolidation: Sinokor’s Aggressive Expansion Reshapes Global Shipping Parallel to geopolitical risks, an unprecedented consolidation of VLCCs led by a single buyer is underway.

South Korea’s Sinokor Group has rapidly amassed control of approximately 120 VLCCs over the past two months, including purchased, leased, and previously controlled vessels. This scale of acquisition is unprecedented in the careers of many longtime market participants. While some estimates place the actual number below 120 vessels, even conservative figures suggest the buying spree involved around $1.5 billion, with some participants estimating totals nearing $3 billion.

The acquisition targets have largely been older vessels, aged 10 years or more. In recent weeks, resale prices for such ships have climbed, pushing up long-term charter costs as shipowners capitalize on asset appreciation to demand higher rates.

Svein Moxnes Harfjeld, CEO of DHT Holdings, described the trend as a "fundamental shift" in global fleet ownership consolidation. He noted that its effects are already permeating spot freight rates, time-charter demand, and secondhand VLCC valuations, stating, "This consolidation is altering pricing dynamics and putting pressure on the timely availability of vessels."

Multiple Fundamental Drivers Sustain Upward Momentum Beyond geopolitics and market concentration, broader supply-demand dynamics are also contributing to the surge.

June Goh, senior analyst at Sparta Commodities, highlighted several positive fundamental drivers behind rising VLCC rates:

- The shift of Venezuelan crude from "dark fleet" transportation to compliant vessels, - Increased Middle Eastern crude volumes from OPEC+ production hikes, - And rising demand from Indian refineries switching from Russian crude to Middle Eastern sources.

All these factors have significantly boosted demand for compliant VLCC capacity.

According to Clarkson Research Services, crude tanker earnings are off to their strongest annual start in over 30 years. Benchmark VLCC daily earnings have now surpassed $120,000, having increased more than fourfold over the past month. Market volatility is also affecting physical oil prices, with traders noting pressure on regional spot crude due to shipping market disruptions.

Goh also warned that spillover effects are spreading downstream: "The Suezmax and Aframax markets will soon feel the impact of spillover from the VLCC freight market."