Low oil prices continue to shape the tanker freight market. Even as price indices were bottoming out, on September 9 Saudi Arabia announced a $1 per barrel cut in its Arab Light price for Asian customers, equal to $2m off the price of a VLCC cargo. Russia’s Gazprom CEO told reporters that Asian oil demand was strong, particularly due to China’s ongoing purchases of crude oil for its strategic reserve (SPR). China is adding about 0.5m barrels per day to its reserves, the equivalent of almost two VLCC cargoes per week. Is the Middle Kingdom merely taking advantage of low prices, as it has in the past? In 2015, when oil prices bottomed out, Chinese crude oil purchases for its newly completed 40 days’ SPR were enough to drive a VLCC market to a cyclical peak. Or is Beijing expecting some sort of disruption to oil markets that would necessitate a larger strategic reserve? Either way, the marginal increase in demand has been enough to light a fire under the VLCC freight market this month. The Baltic Exchange VLCC average daily TCE rose 130% over 30 days to reach $87,532 on September 18, with $100,000 considered to be achievable in the coming days. By the time you read this, rates on the Middle East to China voyage may already have done so, because they sat at $95,835 per day on September 18, up 151% in 30 days and up by over 50% in just eight days. On the Middle East to Singapore voyage, VLCC TCEs have slipped into six figures, hitting $100,532 per day on September 17, their highest level since March 2023 when post-lockdown refinery throughput was recovering. As US crude oil exports hit 5.2m barrels per day, their highest level since December 2023, rates on the US to China VLCC voyage rose from $46,109 per day at the end of August to $83,045 on September 17, only to slip back to $81,251 on the 18th. With US products demand adjusting downwards after the driving season, producers will be happy to ship more product until the winter arrives. Exports from West Africa to Asia are also attracting higher freight rates, with TCEs rising 119% over 30 days to September 18, but peaking on September 17 at $86,277. For now, the momentum in VLCC markets has not translated into significantly higher suezmax earnings, though momentum is still upward. Guyana to ARA voyages were earning $51,402 per day on September 18, up 23% over 30 days, while West Africa to Europe voyages added 15% to reach $53,283, levels last seen in April this year. Suezmax voyages from the Middle East to the Med were rated 9% higher over 30 days as of September 18 at $48,758. Aframax owners enjoyed August, their best month since April, and September continues the trend, with average earnings up 6% over the 30 days to September 18 at to $36,452 per day. The action has been mostly in the Pacific, with rates on the western Canada to China voyage up 33% over 30 days to $48,000 per day on September 18. Over the same dates, the TCE for Kuwait to Singapore voyages was up 35% at $39,560 per day. In the Atlantic and Caribbean, by contrast, TCEs were all off a few per cent. The Baltic Dirty Tanker Index stood at 1,147 on September 18, its highest since June 2024. At London International Shipping Week, one could hear the champagne corks popping. TagsSplash Extra September 2025