Risk of US-Iran conflict combined with "someone monopolizing 1/3 of shipping capacity," global tanker rates soar to a six-year high
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The global Very Large Crude Carrier (VLCC) market is experiencing the most dramatic rate shock in six years. The dual factors of war risk premium and an unprecedented wave of fleet consolidation are pushing freight rates to historic highs, beginning to transmit to physical crude prices and the entire tanker market.
On February 25, Bloomberg reported that Saudi national shipping company Bahri recently chartered five VLCCs at a daily rate of $200,000—the highest level recorded by the Baltic Exchange in six years, with the DHT Jaguar reaching a daily price of $208,000.
Meanwhile, Polymarket data shows that the market-implied probability of the US launching military strikes against Iran before March 15 has risen to 47%. The risk of Hormuz Strait blockage is rapidly being priced into freight rates and Brent oil futures, which remain above $70 per barrel.
Another main factor behind the surge in rates is equally notable. According to previous WallstreetCN articles citing Bloomberg, several industry veterans report that Korean Sinokor Group has quickly acquired or leased a large number of ships in the past one or two months, now controlling about 120 VLCCs, roughly one-third of the world's tradable VLCC fleet.
SFL Corp.'s CEO Ole Hjertaker stated bluntly: "Effectively, one party or group of collaborators controls about one-third of available or trading VLCCs," and this highly concentrated market structure is reshaping global tanker pricing mechanisms.
War Premium: Hormuz Risk Returns to the Core of Market Pricing
The report notes that the Strait of Hormuz has once again become the most sensitive geopolitical nerve in the global energy market.
According to CCTV News, on the evening of the 25th local time, Iranian Foreign Minister Aragchi led the Iranian delegation to Geneva, Switzerland, to attend the upcoming third round of US-Iran talks on the 26th. WallstreetCN points out that recently, US president Trump admitted he is considering a “limited military strike” against Iran.
The report states that US-Iran relations remain tense, with expectations of potential US military action rising rapidly, and war risk insurance premium is now swiftly reflected in VLCC charter rates.
Polymarket’s probability pricing for “whether the US will strike Iran before March 15” has reached 47%, directly reflecting the market’s high alert to Hormuz Strait interruption risk.
Analysts believe that if Iran blocks the strait, the global energy market will face immediate panic shock, and VLCC—central carriers for Middle Eastern crude exports—will bear the brunt of rising charter rates.
Meanwhile, Brent crude futures simultaneously reflect this risk premium, maintaining above $70 per barrel in Thursday's early session. The overlap of war risk and supply disruption expectations has prompted charterers to scramble for ship space, further driving up spot freight rates.
Capacity Monopoly: Sinokor's Aggressive Expansion Shakes Global Fleet Structure
Parallel to geopolitical risks is an unprecedented VLCC merger led by a single buyer.
According to WallstreetCN, Korean Sinokor Group rapidly amassed control over about 120 VLCCs within the past one or two months, including purchased, leased, and previously controlled vessels.
This scale has led several industry veterans to say they have never seen anything like it in their careers. Some estimate the real number is less than 120, but even at the lowest estimate, this buying spree cost about $1.5 billion, with some participants putting the total close to $3 billion.
Acquisitions are focused on ships older than ten years. Over the past weeks, resale prices for these ships have climbed, pushing up long-term charter costs, enabling shipowners to translate asset appreciation into higher rents.
DHT Holdings CEO Svein Moxnes Harfjeld characterizes this trend as a "fundamental shift" in global fleet ownership consolidation, and notes that its influence has permeated spot freight, time-charter demand, and second-hand VLCC valuations: “This consolidation is changing pricing dynamics and puts pressure on vessel availability.”
Multiple Fundamental Drivers, Ample Upward Momentum for Rates
Besides geopolitical and market concentration factors, broader supply and demand dynamics are also fueling the surge.
Sparta Commodities’ senior analyst June Goh points out several supportive fundamental drivers behind higher VLCC rates:
Venezuelan crude is shifting from “dark ship” transport to compliant capacity, OPEC+ expansion is bringing more Middle Eastern crude cargo, and Indian refinery demand is shifting from Russian to Middle Eastern crude, all significantly boosting demand for compliant VLCCs.
According to Clarkson Research Services, crude tanker earnings have seen the strongest annual start in over 30 years. VLCC benchmark daily earnings have already exceeded $120,000, rising more than fourfold in the past month. Market volatility is affecting physical oil prices, with traders noting spot crude in some regions is under pressure due to shipping market turmoil.
Goh also warns that spillover effects are spreading downstream:
“The Suezmax and Aframax markets will soon be affected by spillover from the bulk freight market.”
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