Oil tanker operators are experiencing record profits as vessel hire costs in the Strait of Hormuz have nearly doubled, driven by increased demand as traffic through the region begins to recover. Following Iran’s recent lifting of its blockade after a ceasefire agreement with the U.S., traffic remains below pre-conflict levels, with only a fraction of the usual 125 daily ships navigating the strait. Currently, around 100 tankers are reportedly stranded in the Gulf, contributing to a vessel shortage as Middle Eastern crude exports rise.
Daily hiring rates for tankers outside the Strait have surged from $106,500 to $190,500 in just a week, while average earnings for very large crude carriers (VLCCs) have reached nearly $470,000 per day, reflecting a significant increase. Ship brokers note that tanker owners are gearing up for a surge in Middle Eastern crude shipments, with spot earnings remaining robust despite reduced cargo volumes due to ongoing U.S.-Iran tensions.
Meanwhile, Middle Eastern producers are actively issuing tenders, particularly the Abu Dhabi National Oil Company, which is encouraging buyers to load from within the Gulf. Although tanker rates have spiked, war risk insurance costs have decreased, providing some financial relief for ship operators. Indian buyers, including major refiners, are also seeking crude from the region following supply disruptions.
