2 min readMar 5, 2026 05:32 AM IST
First published on: Mar 4, 2026 at 08:47 PM IST
Freight rates for crude tankers have spiked dramatically and doubled over the week as the conflict in West Asia continues to unsettle traffic through the Strait of Hormuz, the world’s most critical oil shipping corridor, pushing up crude oil prices.
Adding to the woes, insurance cover has become both costlier and harder to secure with insurers cancelling war risk cover.
Daily earnings for a very large crude carrier (VLCC) on the benchmark Middle East-China route hit a record high and nearly doubled $423,000 on Monday in a week, marking an unprecedented surge, according to Lloyd’s List data. It was $218,000 per day last week.
The rally was not confined to one route. The Middle East Gulf–Singapore run also saw rates shoot up sharply, while the global average VLCC earnings climbed to levels not seen in well over a decade.
According to Lloyd’s List, Baltic Exchange’s TD3C MEG-China index was assessed at $423,736 per day on Monday and TD2 MEG-Singapore index was at $257,986 per day. Global average VLCC index reached $280,941 per day, the highest level since at least 2008.
MEG-Med Suezmax index more than tripled over the weekend to $267,579 per day and global average Suezmax index rose 23% vs Friday, to $158,531 per day, Lloyd’s List said.
The spike extended to other segments of the tanker market.
Suezmax rates on the Middle East Gulf–Mediterranean route more than tripled over the weekend, and global Suezmax averages posted a steep jump compared with Friday levels.
Owners are suddenly in a position to command premiums impossible just weeks ago.
While behind the surge lies a mix of fear and scarcity, shipowners are wary of sending vessels into the Gulf amid escalating security risks.
With uncertainty hanging over Hormuz, tanker brokers and oil companies are exploring alternatives.
One option under active consideration is diverting crude flows through existing pipeline networks to bypass the Strait of Hormuz. Saudi Arabia’s east-to-west pipeline, which can move up to 7 million barrels a day from its Gulf fields to the Red Sea port of Yanbu, has come into sharper focus as a potential safety valve.
Shipowners are wary of sending vessels into the Gulf amid escalating security risks. (File Photo) 
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