VLCC Market Experiences Significant Repricing Amidst Freight Boom

The Very Large Crude Carrier (VLCC) market has undergone a sharp repricing throughout 2026, with a notable acceleration observed since late July. This trend is attributed to exceptionally strong freight earnings directly influencing secondhand values, according to Hellenic Shipping News Worldwide.

While prices had been increasing earlier in the year, the recent surge has been particularly rapid. This reflects a combination of geopolitical disruption, reduced effective vessel availability, and the immediate cash-flow potential of existing tonnage.

Freight Earnings Drive Upward Trend

The Baltic VLCC TC Average, a key indicator for freight rates, has shown a significant upward trajectory. It rose from approximately USD 198,000 per day in July to around USD 272,000 per day in August, before averaging close to USD 449,000 per day during the first half of September. By 18 September, the index had reached approximately USD 722,946 per day, a substantial increase from around USD 79,700 per day in mid-September 2025.

Geopolitical developments, including escalation around Iran and disruption surrounding the Strait of Hormuz, have played a major role. These factors have increased war-risk exposure, affected vessel availability, and created greater uncertainty in normal trading patterns. Concurrently, diversions, longer voyage requirements, and increased demand for alternative crude sources have boosted tonne-mile demand, tightening effective supply and placing further upward pressure on earnings.

Asset Values and Sales Activity React

Asset values have responded in kind. Between 10 July and 18 September, the value of five-year-old VLCCs increased by approximately 18.6%, from around USD 145 million to USD 172 million. Ten-year-old tonnage saw an even greater rise of about 32%, moving from USD 115 million to USD 152 million. Fifteen-year-old vessels experienced a nearly 61% increase, from approximately USD 83.5 million to USD 135 million, while resale values climbed from around USD 175 million to USD 193 million.

The sales and purchase (S&P) market also reflects this shift in sentiment. A total of 103 VLCC sales were recorded between January and 14 September. Activity was particularly high in January and February, with 38 and 27 sales respectively, before slowing in spring. Momentum returned during the summer, with 10 sales in August and nine by mid-September.

Older Tonnage in Demand

Of the 103 VLCCs sold, 43 were aged 11–15 years and another 32 were 16–20 years old, indicating a strong market for older vessels. September saw a further move towards older tonnage, with the average age of transacted vessels reaching approximately 18 years, up from 13.6 years in August.

Recent transactions underscore the scale of the repricing. The 2007-built DHT EUROPE sold for approximately USD 51 million in January, while the 2008-built “RAIN CUBIC” reportedly sold for around USD 90 million in September. Similarly, the 2012-built “INGRID” changed hands in February for approximately USD 89 million, compared with around USD 132 million reportedly paid for the older 2010-built KALLISTA in September. At the modern end, the 2026-built “LAS PALMAS” sold for approximately USD 162.5 million in May, with the similarly aged “PINIOS” reportedly changing hands at around USD 200 million in September.

Existing VLCCs can capture current strong freight earnings, providing little incentive for owners to sell without a substantial premium. Long newbuilding lead times further bolster secondhand demand. However, the outlook remains uncertain, with potential de-escalation around Iran possibly triggering a correction, while continued disruption could keep freight and asset values elevated.