Supertanker concentration near Strait of Hormuz drives global vessel shortage and record-high oil freight rates
More than 40% of the world’s supertanker fleet has converged on the Persian Gulf region, creating a global shortage of very large crude carriers and pushing oil freight rates to all-time highs, according to shipping data provider Signal Ocean.
The draw is simple: soaring fees for moving oil through the Strait of Hormuz. But the concentration of vessels near one of the world’s most critical chokepoints is rippling far beyond the Middle East — squeezing supply on routes across the Atlantic and Pacific alike.
Supertanker glut near Hormuz squeezes global vessel supply
Of the roughly 850 very large crude carriers (VLCCs) operating worldwide, more than 40% are now either sitting in the Persian Gulf or within two days’ sailing time of it, according to Signal Ocean data. That’s an extraordinary concentration for a single region, and the consequences are being felt immediately everywhere else.
Ships that would normally be repositioning toward loading points in the Americas or West Africa are instead clustering near Hormuz, chasing record-high freight fees.
The most visible sign: the number of empty VLCCs heading toward Atlantic ports has roughly halved compared with a month ago. Ships that would normally be repositioning toward loading points in the Americas or West Africa are instead clustering near Hormuz, chasing record-high freight fees.
Freight markets from the US Gulf to the Pacific are feeling the squeeze, with rates climbing to levels that would’ve seemed implausible before the conflict began. This isn’t a regional problem anymore.
Conflict risk and ship-to-ship transfers the primary cause of vessel concentration
Fees for moving oil through the Strait of Hormuz have gone through the roof — that part is straightforward. Why those ships are then staying in the area is more complicated.
Continued attacks on vessels in the region have made many tanker operators unwilling to transit Hormuz directly. A so-called shuttling trade has developed instead: crude gets offloaded onto other ships in the Gulf of Oman or at transshipment points off the west coast of India, bypassing the strait entirely. That process ties up multiple vessels for a single cargo that would otherwise require just one, pulling capacity out of the global fleet in ways that compound the crunch on routes far removed from the conflict zone.
Signal Ocean analyst Georgios Sakellariou called the arrangement “inefficient,” and the numbers back that up.
Despite all of this, crude flows through Hormuz have actually recovered to near pre-war levels in recent weeks. It’s a counterintuitive detail — demand for tankers in the area stays high even as the risks keep operators on edge, sustaining both the vessel concentration and the elevated fees that come with it.
Freight rates reach all-time highs on key routes
The numbers are striking. Assessed supertanker rates for the Persian Gulf to East Asia route — a journey of roughly three weeks — hit a record of nearly $1.4 million per day, a surge of almost 540% since before the conflict began. That pace dwarfs the roughly 40% rise in Brent crude prices over the same period.
On the US Gulf-to-Japan route, at least one VLCC was offered at a potential record fee of $82 million, or more than $40 per barrel — a 50%-plus increase on the same route from just three weeks earlier.
Moving oil from the Persian Gulf to East Asia now costs more than six times what it did before the conflict. Sakellariou at Signal Ocean was direct about what that means for the industry. “The recent months have been the best of all time for crude tankers,” he said. For oil producers and buyers, those freight costs translate directly into higher delivered prices.
Smaller vessel classes absorb spillover demand as VLCC scarcity spreads
When supertankers become scarce or prohibitively expensive, shippers don’t just stop moving oil — they look for alternatives. Right now, that means Suezmax and Aframax vessels, the mid-size tanker classes that lack the economies of scale VLCCs offer but can still handle significant cargo volumes.
Most of the deals to ship US oil loading in November to Asia have involved these smaller ships, according to Signal Ocean data. The shift is understandable, but it’s generating its own feedback loop: rising demand for Suezmax and Aframax vessels is pushing their rates higher too.
Shipbroker Fearnleys flagged the problem directly in a recent note. “The VLCC’s smaller sisters, Suez- and Aframaxes, are showing no sign of slowing down either, so there’s really nowhere to hide right now,” the firm wrote. Pressure is spreading across vessel classes simultaneously, with no obvious release valve in sight.
Crude producers outside the Middle East — particularly in the Americas — are sustaining high output levels even as Persian Gulf flows rebound. Every class of vessel is being pulled in multiple directions at once, and demand for tanker capacity isn’t easing anywhere.
What this means for global oil freight
The situation, in short, is this: a conflict-driven concentration of supertankers near the Strait of Hormuz has tightened global VLCC supply, pushed freight rates to record highs on multiple key routes, and spilled over into smaller vessel classes now facing their own demand surge. Crude flows through Hormuz have recovered, but the inefficiency of the ship-to-ship transfer system keeps vessels tied up in the region. With high output from non-Middle Eastern producers sustaining additional demand pressure, there’s little near-term relief in sight for shippers looking for affordable capacity on any major oil route.
Kelly is an experienced writer with 15 years of experience exploring the big stories that shape our world, from tech breakthroughs and space exploration to climate, energy, and the fascinating quirks of science. She has a talent for turning complex ideas into sharp, memorable insights that stay with readers long after they’ve finished reading.
