Insight

Venezuela firmly returned to the tanker market spotlight in 2025, as political developments and sanctions dynamics impacted crude flows and vessel demand. From a VLCC perspective Venezuela’s importance is no longer just about how many barrels are exported, but where those barrels go, what type of ships they move on, and whether those trades sit inside or outside the compliant market.

Venezuelan crude exports were highly volatile through 2025, but average flows have held around 850 kbd. The defining feature of the year was the concentration in destinations, with the majority of barrels moving into China. Historically, and particularly prior to the current sanctions regime, a much larger share of Venezuelan crude was absorbed by the US, with Europe also taking meaningful volumes. As exports to China increased, there was a sharp rise in the use of larger tankers, with VLCCs becoming the dominant vessel size loading in Venezuela. Over the same period, the share of Aframaxes had fallen away very quickly.

Against this backdrop, there is a growing amount of speculation about what comes next for Venezuela’s oil sector. The reality, however, is that after years of  underinvestment and the structural degradation of oil infrastructure, it is difficult to make a credible case for a rapid production rebound. Even under a scenario in which international operators were able to re-enter the country, the more realistic near-term outcome would be stabilisation rather than growth. In practical terms, production could be held around 2025 levels, supporting exports in the 800 thousand to 1 million barrels per day range.

For the tanker market, the stabilisation scenario matters less than the question of destination. The key issue is not how much Venezuela produces, but where barrels would go if Venezuelan exports were normalised and returned to the mainstream market.

If the US were to step in and effectively take control of the Venezuelan oil sector, a significant  share of exports would likely be absorbed into the US system. That would support shorter-haul flows and shift vessel demand back toward smaller segments, especially Aframaxes, rather than reinforcing today’s Venezuela-to-China VLCC trade. There is also scope for Europe to take some of these volumes, and that would point in the same direction: a greater weighting toward short-haul demand and smaller ships. The implication of such a shift is that China would be left short by roughly 600 thousand barrels per day. Those barrels would need to be replaced from elsewhere, and this is where the VLCC market impact becomes apparent.

From a fixtures perspective, Venezuela has increasingly become a shadow-market VLCC trade. Our fixtures data shows around eight VLCC fixtures per month in Venezuela during 2025, with most vessels discharging in China. These cargoes are sanctioned, and the vessels involved operate within the shadow fleet, even if they are not formally sanctioned themselves.

The age profile of the VLCCs lifting these cargoes in 2025 is heavily skewed toward older tonnage. We count around 70 individual VLCCs involved during the year, with a strong weighting toward vessels aged 20 years and above. This detail is important because it highlights a practical limitation in any trade normalisation scenario. If Venezuelan barrels were to re-enter the mainstream market, they would need to be carried on mainstream, compliant tankers. The ships currently servicing Venezuelan liftings are tainted by shadow fleet history and would struggle to re-enter commercial trading, particularly given the age profile of the fleet involved. In other words, even if the barrels normalise, the ships that have been carrying them are not automatically released back into the fully compliant trading pool in a way that improves mainstream supply availability.

This is why the core VLCC upside case from Venezuelan normalisation is not direct. In fact, a normalisation of trade could reduce direct VLCC demand out of Venezuela if barrels instead move to the US or Europe on smaller ship sizes. The key benefit would come indirectly, through the replacement demand generated as China sources alternative crude to cover the shortfall created by the loss of Venezuelan supply.

If China replaces sanctioned Venezuelan crude with mainstream barrels, those replacement barrels would be carried on compliant tonnage. Depending on origin, they could generate meaningful incremental demand for the mainstream VLCC fleet. Whether the barrels come from Canada, the Middle East, or elsewhere, replacement flows into China are structurally more likely to support VLCC utilisation because they sit inside the commercial fleet and trade finance system.

On a vessel-demand basis, even if assuming replacement barrels originate from the closest major supply region, the Middle East, an incremental 600 thousand barrels per day moving into China would lift VLCC demand by roughly 16 ships. Longer-haul replacement would push the demand impact higher still.

That said, China may not fully replace all lost Venezuelan volumes. Venezuelan crude has been attractively priced and has also been suitable for strategic stockbuilding. If access to those barrels is constrained and replacement grades are more expensive or commercially less flexible, China may choose to reduce intake rather than fully backfilling the deficit. In that scenario, the uplift to mainstream VLCC demand would be more limited.

The overall takeaway for tanker markets is that Venezuela is less a straightforward demand story and more a mechanism for dislocation between shadow and mainstream shipping. A shift back to normalised exports would likely support Aframaxes first, through shorter-haul destination changes. For VLCCs, the most constructive signal would come from China’s need to replace Venezuelan barrels with alternative imports. With sanctions and compliance tightening the divide between shadow and mainstream fleets, the real VLCC impact lies in the replacement flows into China rather than the Venezuela loading programme itself.

Why the VLCC market had one of the strongest years in a decade — and what could lie ahead

The VLCC market has just wrapped up one of its most powerful freight environments in years. Earnings surged past $100,000 per day, with momentum staying strong throughout Q3 and Q4.

For much of the year, freight rates moved broadly in line with 2024 levels. However, as summer turned into autumn, the market broke away from historical patterns. The immediate driver was a surge in crude and condensate on the water, coupled with a sharp increase in tonnemiles. With more barrels traveling farther and remaining afloat longer, vessel demand shifted decisively, tightening the supply and demand balance – pushing freight rates to recent highs. The more compelling questions, however, are why has this occurred and can it last?

A shift in the global supply chain

After a slower than expected 2024, when global oil supply barely grew and what little growth there came was almost entirely from non-OPEC producers – 2025 finally brought a very different supply story. Global output is set to rise by roughly 2.8 million barrels per day, with meaningful contributions from both OPEC and non-OPEC sources. OPEC alone restored the first tranche of voluntary supply cuts, quickly boosting VLCC cargo availability. At the same time, non-OPEC momentum remains strong, with Brazil, Guyana, the US, and Canada, expanding production and feeding long-haul trade routes.

Looking ahead to 2026, OPEC policy is far from certain, but another 1.2 million barrels per day of non-OPEC growth – most of it west of Suez – appears likely, creating an ideal backdrop for continued VLCC-friendly long-haul flows.

Demand growth matters – but geography matters more

The EIA expects global oil demand to grow by just over one million barrels per day in both 2025 and 2026 – solid but far from explosive. For VLCCs, however, the real story isn’t the pace of demand growth, but where that growth is occurring relative to supply. Demand continues to expand in Asia, while most of the new supply is emerging from the Atlantic Basin. This imbalance forces crude to travel longer distances, structurally lifting tonne-miles which are the driving force of the VLCC sector.

China is currently driving the market

China has played a significant role in this year’s freight strength. Seaborne crude flows into China climbed steadily through 2025, reaching around 12 million barrels per day in October compared with levels below 10 million for much of 2024. Much of this growth came from non-sanctioned, long-haul suppliers such as West Africa and South America, exactly the kind of flows that turbocharge tonnemiles. While some sanctioned barrels from Iran and Venezuela continue to move on VLCCs, these typically travel on shadow-fleet tonnage and don’t impact the mainstream market.

The key question now is how much of China’s recent strength reflects real consumption and how much is tied to stock building? Throughout 2025, China has been steadily adding to inventories under a Strategic Petroleum Reserve (SPR) mandate that runs through March 2026. With expectations of another mandate and new storage capacity under construction, continued stockpiling remains a feasible scenario. Whether for consumption or storage, if China keeps buying at this pace, its import appetite will remain a powerful driver of VLCC demand.

The impact of sanctions

Geopolitics continues to shape the VLCC landscape, with sanctions emerging as one of the most influential structural factors. A large shadow fleet now operates outside mainstream markets: about 100 VLCCs are officially sanctioned, and roughly 100 more have carried sanctioned barrels in recent years and none of these are likely to return to regular trading. This removes around 23% of the global VLCC fleet from normal market participation, leaving the compliant fleet not only smaller but also less flexible due to sanctions-driven trade inefficiencies. Nearly all vessels aged 20 years or older now operate exclusively in this dark fleet.

Sanctions have also reshaped trade flows. Earlier this year, US tariffs prompted India to briefly reduce purchases of Russian crude and turn to Atlantic Basin suppliers instead, which immediately boosted VLCC demand and tonnemiles. These changes can be temporary, but they tend to sharpen freight strength at pivotal moments. More disruptions are expected as new compliance deadlines take effect toward the end of 2025.

Newbuildings vs. effective tonnage supply

At first glance, the scheduled delivery of 40 new VLCCs in 2026 might seem like a clear threat to freight rates. However, effective fleet growth tells a more nuanced story. Nearly 20% of the global VLCC fleet is now 20 years or older, and utilisation typically begins to decline from around age 15, slipping further each year. Many of these ageing vessels are moving permanently into the shadow fleet, never returning to compete with modern tonnage. Once these dynamics are accounted for, effective fleet growth remains comfortably below 3%, which is modest in comparison to historical averages.

A market driven by fundamentals and a watchlist for 2026

The defining forces of 2025 have been strong long-haul flows, elevated volumes of crude in transit, China’s return as a reliable import driver, a shrinking compliant fleet, sanctions-driven inefficiencies, and a maturing fleet that continues to limit effective supply. Some variables can shift quickly and will require close monitoring, for example China’s stockpiling strategy, OPEC production policy, and the evolution of sanctioned oil flows. However, the underlying structural drivers remain firmly in place.

Overall, the VLCC freight market heads into 2026 on a strong position supported by elevated tonnemiles, tight effective supply, and demand patterns that continue to favour long-distance movements.

As the global VLCC community gathers in Dubai for Bahri Week, all eyes are once again on OPEC and Middle East production policy. OPEC+ members, led by Saudi Arabia, have begun unwinding their voluntary production cuts, and the return of supply is reshaping momentum across both oil and tanker markets. After more than a year of orchestrated oil market tightness, the reintroduction of barrels is re-establishing the Middle East as the core driver of VLCC demand.

In oil markets, the balance has shifted subtly but decisively. As Middle Eastern producers have increased output, a growing share of those incremental barrels has been drawn into Asia, which remains the deepest and most price-sensitive demand centre. Earlier this year, Asian refiners relied more on stock drawdowns and opportunistic Atlantic Basin cargoes, but as Middle Eastern supply loosened and differentials softened, their focus has swung back toward to the region.

For the tanker market, this evolution has been unambiguously positive. As OPEC+ producers have completed their rebalancing after earlier oversupply and the Middle East moves beyond its seasonal demand peak, more crude oil is now moving into the export market. That is already visible in rising VLCC cargo counts and fixture momentum. The increase has not been dramatic — but it has been consistent and sustainable. It is precisely this kind of predictable, volume-driven trade, rather than sporadic arbitrage flows, that underpins lasting rate support for supertankers.

The VLCC segment remains particularly responsive to Middle East oil flows. With 85% of crude and condensate exported from the region in 2024–2025, already being carried by VLCCs, and 75% of the OPEC+ production increase stemming from this region, the scale of the opportunity is obvious. Each additional barrel made available for export directly translates into greater long-haul transport demand — and VLCCs are uniquely positioned to absorb that trade.

On the supply side, vessel availability remains tight, and with no significant movement in the VLCC fleet size the freight market direction will remain driven by consistent vessel demand in the near term. VLCC fleet growth is effectively negligible this year, with new deliveries limited. Even with more newbuildings scheduled to enter the market in 2026, much of that additional capacity will be offset by an ageing fleet that is gradually seeing its utilisation decline. In practice, the effective reduction in trading ability from older vessels is likely to outweigh the capacity added from new tonnage.

Even with the improving fundamentals, the market is not without risks. Geopolitical volatility in the Middle East and Red Sea remains ever-present and continues to cast a shadow on freight dynamics. The current demand strength also depends on Asian refiners maintaining healthy margins — a downturn there could temper cargo intake. And while OPEC+ is currently prioritising exports, its strategy remains reactive and could pivot back toward restraint if crude prices come under pressure.

Looking ahead, the return of Middle Eastern supply appears to be more than a temporary boost — it signals a structural shift in the fundamentals supporting the VLCC market. With Asia continuing to pull incremental barrels and Middle Eastern exports moving back toward growth rather than restriction, the demand base for VLCCs is strengthening. Combined with limited net fleet expansion and an ageing fleet, the freight market is set to be driven increasingly by cargo demand rather than ship supply. While geopolitical and policy risks remain in view, the balance of momentum has turned decisively positive, and the current strength in the VLCC freight market is a reflection of this shift.

This year marks Tankers International’s 25th anniversary, a quarter of a century since the launch of the world’s leading VLCC pool, backed by some of the world’s leading ship owners. During that time, the crude tanker market has experienced profound change.

From regulatory shifts and shipbuilding cycles to evolving trade routes, new customer profiles, geopolitical shifts, and the rise of data-driven decision-making, the market we operate in today looks almost unrecognisable compared to 2000, when the TI Pool started operating. However, amidst all these changes, one constant remains, the vital role of VLCCs in powering global trade and meeting the world’s energy needs.

As we celebrate this significant milestone, it’s worth reflecting on the ‘then and now’ to explore just how dramatically the industry has changed.

Regulation: From double hulls to decarbonisation

In the early 2000s, the industry was adapting to the Oil Pollution Act of 1990 (OPA90), which phased out single-hull tankers in favour of more secure, double-hull designs. This sparked a wave of newbuilding orders and set higher safety and environmental standards across the tanker fleet.

Fast-forward two decades and the focus has shifted from structural safety to emissions reduction. The IMO 2020 sulphur cap, effective from January 1st, 2020, established a global sulphur cap of 0.5% on marine fuels. This forced shipowners to make a strategic choice; to run vessels on more expensive low sulphur fuel oil, to retrofit existing vessels with scrubbers or to invest in new, compliant tonnage.

As a result, new ship designs increasingly featured scrubber systems built into their propulsion setups to ensure compliance from the outset of the new regulation.

Today, the innovation drive continues for shipowners, but the focus has shifted towards adopting alternative, lower-emission fuels such as LNG, ammonia, and methanol. With no clear consensus on the most effective solution for VLCCs, owners are pursuing a range of propulsion options, leading to a greater variation in newbuilding designs.

In recent years and in the years to come, the drive for decarbonisation measures and regulations has only intensified. Emerging frameworks such as the EU ETS and the IMO’s CII should accelerate the scrapping of older, inefficient vessels, while driving demand for dual-fuel and alternative-fuel-ready newbuilds. The next 25 years will likely see a fragmented but steadily advancing adoption of LNG, methanol, ammonia, and other alternative fuels.

Orderbook and newbuildings

The VLCC orderbook has historically been cyclical. In the early to mid-2000s, surging oil demand from China and the need to build new tankers to transport this extra demand, overwhelmed shipyards and this led to long delivery lead times. This surge was further amplified by OPA90, which required the phase-out of single-hulled tankers in favour of double-hulled designs. As a result, the orderbook-to-fleet ratio climbed above 50%, peaking in 2009 with more than 250 VLCCs on order.

Today, the VLCC market looks very different. Last year, just one single VLCC was delivered, reflecting the industry’s hesitation to commit due to the fuel-transition uncertainty. However, with around 150 VLCCs already over 20 years old, fleet renewal is, once again, unavoidable.

The current orderbook stands at just over 100 vessels, roughly 12% of the trading fleet, and the VLCCs being built today are fundamentally different from their counterparts 25 years ago with optimised hull designs, energy-saving devices, and dual-fuel capabilities, designed not just for efficiency but for flexibility in an era of regulatory uncertainty.

Trade routes: Shift to the east and longer hauls

When Tankers International was formed in 2000, VLCC trade routes looked very different from what they are today, though they have always reflected the geography of oil supply and demand.

In the early 2000s, crude oil flows ran primarily from the Middle East to the US and Europe. Over time, however, the centre of demand shifted decisively eastward.

China’s accession to the World Trade Organization in 2001 triggered a surge in manufacturing and export-led growth, driving a greater demand for crude oil. The resulting economic boom transformed the VLCC market, with tonnemiles climbing as crude moved, not only from the Middle East, but also from West Africa and Latin America to Asia. At the same time, the US shale revolution sharply reduced American oil imports, cutting once-dominant transatlantic flows to a fraction of their former levels.

Over the past 25 years, VLCC trade routes have evolved with continued Middle East-to-Asia flows, and now increasing volumes from South America and the US, and long-haul tonnemiles driving demand. As Asian consumption continues to rise and South America emerges as a major supply hub, the eastward momentum is expected to persist, supporting VLCC demand well into the future.

Customers: From oil majors to traders and NOCs

In the early years of the Pool, Western oil majors and NOCs dominated VLCC chartering, often backed by their own fleets. Over time, many oil majors divested their ships and shifted to chartering from independent owners.

Meanwhile, commodity trading houses have emerged as some of the most active and influential charterers, leveraging VLCCs to move cargoes rapidly in pursuit of opportunity trading. NOCs from Asia and the Middle East have also built sophisticated trading arms, seeking greater control over their supply chains.

Looking ahead, new customer types may emerge, the ESG-driven charterers prioritising ‘green’ shipping tonnage on one side, and charterers of sanctioned ‘dark fleet’ tonnage on the other, reflecting the increasingly fragmented market landscape.

Geopolitics and its impact on the market

Geopolitics have always shaped tanker markets, but the risks have evolved. In the early 2000s, concerns centred on Middle Eastern supply disruptions, with events like 9/11 and the Iraq War creating war-risk premiums and sudden spikes in freight rates.

Today, the focus is less on physical supply disruption and more on sanctions and trade fragmentation. The Russia–Ukraine conflict and G7 price cap have re-routed oil flows and spawned a shadow fleet, increasing tonnemiles and reshaping competition.

At the same time, U.S. shale production and growing supply from South America have added supply resilience, diversifying global flows while also creating new geopolitical variables tied to trade policy.

Technology and data

Perhaps the most dramatic change has been the industry’s adoption of technology and data. In 2000, chartering was done by phone and fax, AIS was still in its infancy, and information was fragmented. Market intelligence relied on experience, instinct, and personal networks.

Today, AIS tracking, satellite imagery, and integrated data platforms have made the market almost entirely transparent. Sophisticated analytics guide decisions on routing, congestion, and supply-demand balances, while onboard connectivity has improved communication and seafarer welfare.

Looking forward, Artificial Intelligence (AI) promises even greater optimisation, whether in predictive maintenance, market forecasting, or route planning, while the human element remains essential for negotiation, client relationships, and judgement calls that data alone cannot provide.

The future of the VLCC market

From emerging regulations to trade routes, and the tech boom, the VLCC tanker market has undergone a profound transformation over the past 25 years.

As Tankers International marks its 25th anniversary, one thing is clear, while the challenges facing the VLCC sector continue to evolve, so do the opportunities for innovation and market adaptation, as the industry continues to grow and change.

The VLCC freight market has gained momentum in the first half of 2025, with earnings generally higher compared to the latter half of 2024. This improvement comes despite various uncertainties and evolving market dynamics, illustrating the market’s resilience.

One significant driver has been the impact of tariffs, particularly the threat of US tariffs on China. This has led to a decrease in VLCC liftings from the US to China, impacting tonne-miles due to the long-haul nature of this route. In general, VLCC volumes out of the US have declined overall, indicating that American crude oil has been exported on smaller tankers to more localised markets.

The return of OPEC+ voluntary production cuts also played a role in market dynamics. While headline figures point to rising output, much of this increase has been masked by some countries compensating for prior over-production. Additionally, the increase in supply also coincides with regional demand peak in the Middle East. This means we have not seen a significant change in exports from this supply growth. However, mainstream VLCC fixture counts in the Arabian Gulf have shown an upward trend. Looking ahead to the second half of 2025, more barrels will become available for exports as over-producers catch up with targets and seasonal local demand begins to fade.

Sanctioned crude producers, particularly in Iran, continue to disrupt the market. While Iranian exports have been at high levels, the recent escalation of hostilities between Iran and Israel has heightened significant geopolitical risk. Tensions over the Strait of Hormuz, a crucial geopolitical chokepoint, have led to increased insurance premiums and a potential shift in charterer preferences for alternative loading regions. Although the recent ceasefire has brought a measure of stability, the region remains a source of potential volatility for oil flows and tanker operations. Any renewed tensions could be capable of swiftly altering market dynamics.

On a more positive note for VLCCs, South America, especially Brazil, has emerged as a significant growth area. Increased crude supply, combined with tightening sanctions on dark fleet tankers and China’s retaliatory tariffs on US crude, has led to a substantial rise in VLCC shipments from Brazil to China. These long-haul voyages are highly supportive of tonne-miles, reinforcing the region’s growing strategic importance in global trade flows.

Global oil demand continues to rise, albeit at a slower pace. China remains a key driver for the VLCC segment, and despite macroeconomic pressure and a slowdown in demand growth, its crude imports have taken an upward trend. There’s a positive sign as China’s refinery maintenance season concludes, potentially leading to more crude oil entering their refining systems. Furthermore, mainstream tanker demand into China has increased, with a notable rise in movements from long-haul load areas like West Africa and South America. Early indications also suggest a decline in sanctioned VLCC trades into China, which could further benefit the mainstream market.

The overall VLCC fleet size remains somewhat inflated due to the continued sales of older vessels to the dark fleet, leading to historically low scrapping rates. However, the orderbook for newbuilds is relatively small. This combined with ongoing oil demand growth, contributes to a generally bullish sentiment for VLCC market microeconomics.

Looking ahead, the VLCC market appears poised for a strong second half of 2025. Geopolitical tensions, notably the Iran-Israel conflict, could continue to drive supply chain disruptions. However, shifting trade patterns due to US tariffs are redirecting long-haul VLCC routes towards growth regions in South America, generating similar valuable tonne-miles. Furthermore, as OPEC+ voluntary production cuts translate into increased actual export volumes, these additional barrels will undoubtedly boost demand for the VLCC segment. Together, these factors indicate a positive trajectory for the VLCC market in the coming months.

Geopolitics and supply shifts drive sustained VLCC demand from Brazil to China

The combination of rising Brazilian crude supply, shifting geopolitical dynamics, and price-sensitive Chinese refinery demand has led to a significant increase in VLCC shipments from Brazil to China in recent months.

Several new FPSOs (Floating Production Storage and Offloading units) came online at the end of 2024, enabling Brazil to steadily ramp up its crude oil production and exports in early 2025. According to data from Vortexa, Brazilian crude exports rebounded sharply in March to nearly 2 million barrels per day (mbd), after hitting a seasonal low of just 1.3 mbd in January.

Our proprietary fixture data reflects  the rebound. VLCC liftings from Brazil to China have increased steadily this year – from just five in January to 14 in March – with this elevated activity  sustained through April and May. This follows a downward trending VLCC cargo count throughout most of 2024, on the back of Chinese refiners buying more sanctioned Iranian oil and using dark fleet vessels to transport these barrels, diverting demand away from mainstream markets.

Several market forces are contributing to the recent upward trend. One key driver is the tightening of US sanctions targeting the dark fleet tankers linked to Iranian and Russian trades, as well as “teapot” refineries that have traditionally imported discounted sanctioned crude. With these low-cost barrels no longer accessible without the risk of facing a penalty, some refineries have turned to alternative mainstream sources. Brazil is a natural candidate.

Adding to the momentum, China’s 10% retaliatory tariffs on US crude imports continue to make American barrels uneconomical for Chinese buyers.

In March, Saudi Arabia raised its official selling prices to Asia, further straining the budgets of price-sensitive refiners and encouraging a shift to more affordable Atlantic Basin grades. Brazil’s growing export availability met that demand at the right time.

While a round voyage from the Middle East to China typically takes around 60 days, the Brazil to China roundtrip could take 100 days and more. This longer sailing duration locks in vessels for extended periods, tightening available tonnage and lending support to VLCC freight rates. As more ships are committed to the Brazil to China route, the knock-on effect benefits the wider VLCC market.

Looking ahead, the outlook remains positive for VLCCs. While OPEC+ may gradually ease production cuts and Asian buyers could resume more purchases from the Middle East, so far as we enter June, our fixture data already shows that at least 14 cargos are scheduled to be loaded from Brazil to China in June if they discharge as reported. If Brazil continues expanding its crude production, we expect the Brazil to China VLCC flow to remain strong, providing continued support and demand for VLCCs in the months to come.

Data Source: Tankers International VLCC Database

Read our Data Spotlight on historical VLCC liftings in Brazil HERE.

In a nutshell, what is your role at Tankers International?

I sit on the chartering desk at Tankers International (TI) along with a dedicated team of 4 charterers; 2 in London and 2 in the US. I am responsible for negotiating and facilitating fixtures for the VLCCs within the pool, the size of which means working with a large range of customers and, therefore, a large and diverse cargo portfolio.

It is the combination of our team’s collective hard work and our global presence that achieves better scheduling of the fleet and ultimately a higher laden versus ballast ratio for all the vessels. I also ensure that the voyages are profitable, are in line with our forecast for the market going forward, and that they adhere to international regulatory compliance standards.

How did you get here?

Shipping has always been part of the family, with my father working in the clean tanker segment for 45 years. This close connection to shipping inspired me to study Maritime Business at Southampton Solent University. Straight after getting my degree, I got a job at Poten & Partners, beginning in the operations department before working my way onto the VLCC spot desk. I really enjoyed putting the theory I learnt at university into practice. The dynamism and high stakes of the VLCC market are an added bonus.

Knowing that I wanted to remain in, and pursue the VLCC sector, I was very keen to work at TI, given that it is the world’s largest VLCC pool. It truly is a global role – from waking up with messages from brokers in Singapore, to working on quotes for cargos for Asian clients, and closing the day with the Americans. It is an industry where no one day is the same and that’s what makes it such an exciting and enjoyable one to be part of.

Diving deeper into your role, how does data support you and therefore, the commerciality of the pool?

Data gives us critical insights into the market and the current rates.

Having a database with 100,000 historical VLCC fixtures, each with 40+ data points also means that, as a chartering desk, we’re completely in tune with the market. Being informed about market fixtures gives us a solid starting point for our own deals, allowing for smoother negotiations.

Additionally, this knowledge empowers us with accurate market value and prevents us from being lowballed. As the saying goes, knowledge is power!

The historical data that TI has collected on vessel performance is immensely helpful when setting up a fixture. We’re able to look at the previous performance of the vessel and anticipate any issues that it might run into. This enables us to be proactive in scheduling any repairs that may need doing instead of going in blind and being on the back foot.

For the industry to truly unlock the power of data, companies must invest in training staff to understand it. At TI we do just that but, as an industry, we mustn’t underestimate how important it is to deploy proper training for people to effectively collect, analyse, and apply data insights.

How has TI’s approach to fixing vessels changed over the past 2 years

We see fixtures as providing not only profit, but also valuable data points. TI has been collecting data since its inception in 2000. Integrating data into decision-making has always been at the core of the business. However, since I joined two years ago, TI’s organisation of its data use has been continuously improving.

In this time, as a commercial team and working with our data analyst Aaron Fu, we’ve introduced a bespoke forecasting model using proprietary data and an in-house dashboarding tool. This has been a game changer in providing us with data-backed insights when looking at ship availability and cargo demand.

I’ve seen a shift in priority when it comes to the use of data at TI. Whilst industry connections are, and always will be important, there’s now a greater emphasis on the chartering desk using data than there was previously.

That said, relationships remain critical in any business and particularly in this industry. We have great relationships with leading NOCs and oil majors who often come to us direct with the cargoes they want to fix and we want to be fair and reasonable. We negotiated in good faith a standard set of terms with many of our frequent customers, which has increased efficiency and productivity during pre/post fixing, as well as protecting the interest of our Pool partners

When you combine our relationships with our economies of scale, plus using data to provide market insight and inform decisions – this is a killer combination delivering profitable journeys for pool partners and reliability for charterers.

How does Tankers International stand out among its competitors?

Let’s be straight – in shipping, size matters. We have one of the largest independent VLCC fleet sizes globally of modern, sophisticated tonnage. As a result, we can unlock economies of scale through our volume negotiations, and administrative costs associated with running the fleet. Furthermore, a large fleet allows for improved scheduling and gives access to a greater diversity of cargoes which means better financial performance.

Secondly, your fleet is only as good as the people you hire and the chartering, operations, and senior team have the best interests of our stakeholders in mind. In my team especially, we emphasise trust and transparency in our dealings to ensure the price is right.

Finally, while the industry is still figuring out how best to collect and use data, at TI we have powerful data, in large volumes, and we sure know how to use it! Our competitive edge is our data combined with the talent in our organisation that interprets it effectively. We recognise that we can’t have either one or the other; we must use both human talent and data together to truly leverage powerful insights.

Jamie Ranger, Chartering Executive

What attracted you to Tankers International?

I’ve worked in the maritime sector for over 30 years, and I’ve experienced some dynamic moments during my time. I’ve been lucky to work for a range of different and unique companies from small shipowners focusing on Panamax vessels to large trading houses like Trafigura.

It was during my role at Trafigura that I started to specialise in demurrage – an indispensable and yet often overlooked element of shipping. When I left there, I was looking for a role that recognised the importance of demurrage and Tankers International was a great fit.

It was an exciting time to join Tankers International when I started in 2001 with lots of travel to introduce our team. Since then, we’ve had some impressive achievements, for example increasing the fleet to 70 plus vessels and outliving most other VLCC pools!

Overall, the team at Tankers International is positive about the claims and demurrage role and the present leadership team, led by CEO Charlie Grey is aware of the benefit of how my skills and expertise add to value to the pool, which is very motivating!

Can you shed more insight into demurrage claims in the tanker segment?

Demurrage is all about detail and requires a skilled eye regarding documentation – it’s much easier today as this documentation now comes via email as opposed to hard copies being sent off in the post. This means that certain elements of the claims processing have improved.

But challenges remain. There can be a lack of calculation standardisation between the Charterer and Owner, and we have to negotiate based on the information we have available which may not always be all the facts. As a result, it’s often the grey areas that require experience and a certain amount of trust to reach an agreement.

It is also important to note that charter parties rarely change, with some original contract wordings dating back to 1977 and due to this there are occasions when we find ourselves trying to interpret a term which may have had a different application when first drafted. Of course most Charterers use additional clauses to cover such discrepancies and other operational situations which may arise, but these are not always written in the clearest manner and therefore can also be problematic.

In my opinion having a dedicated person to handle this complexity is a must. Yet, in smaller companies, demurrage is often  job-shared, with less priority placed on this important role, which risks missed revenue opportunities. We’re also seeing broader trends where demurrage teams are changing frequently, including new locations, which adds more challenges to claims settlement.

How does your role support Tankers International?

The claims and demurrage role will continue to evolve and remain vital. Over the years it has cemented its place as an integral part of shipping across all types of commodities. Whilst  some commodities, such as coal, are less impacted by this source of income, the VLCC sector is more greatly affected.

Demurrage rates of VLCC fixtures can reach six figures, making this a valuable post-fixture revenue element.  Under our contracts there is usually an allowance of five days to load and discharge the cargo meaning that with variables such as no room for the cargo, or waiting in the queue outside ports, demurrage is very often incurred.

As the world’s largest VLCC pool, we have the privilege of working with different Owners and Charterers on new routes and welcoming new vessels into our fleet. This requires new contracts to be finalised. Part of my role entails structuring the required laytime charter party clauses that this calls for.

How does Tankers International stand out in its approach to demurrage claims? 

Tankers International is a progressive company and this is reflected in the way it handles demurrage. We have a bespoke system that works out the calculation for demurrage, but this is supplemented by the expertise of the Tankers International team, which balances the Owner and Charterers’ preferences.

We are  transparent with regards to how we report demurrage collection information back to the pool partners, with biannual reporting on demurrage. If requested, we can also add value to our pool partners by advising them on demurrage claims based on our detailed database.

At Tankers International, we pride ourselves on negotiating  with new counterparties and developing new relationships. Our business is always changing  globally, and due to our size, we understand the importance  of having a dedicated person handling demurrage.

What have been your personal highlights during your time at Tankers International?

I would have to say a recent panel discussion at the Oil Operations & Demurrage conference was a real highlight. I was part of a panel, sharing my views and knowledge on the topic of Ambiguous Clauses in Sales Contracts and Charter Parties.  Most of my work is behind the scenes and getting out there to discuss this vital role with fellow professionals was a great experience – I look forward to speaking more on the subject to generate more awareness of the importance and value it can deliver.

Toni Sharp, Claims and Demurrage Manager

As the new year begins, Mette Frederiksen, Head of Research & Insight at Tankers International, shares her perspective on the 2024 market, leveraging insights from the pool’s proprietary fixture data. She also explores how oil and freight dynamics have reshaped the VLCC market over the past year, with predictions for 2025.

Reflecting on 2024

At the start of 2024, the global shipping industry saw encouraging signs and was optimistic about the year ahead. Key forecasting agencies projected strong oil demand growth, driven primarily by China and other nations East of Suez. At the same time OPEC’s production cuts seemed set to be counterbalanced by non-OPEC suppliers expanding their output, particularly in the Atlantic Basin West of Suez.

The temporary removal of Venezuelan sanctions also reshaped the market going into 2024, integrating previously sanctioned trades into mainstream operations while geopolitical events in other parts of the world caused disruptions and delays.

All these factors pointed to increased tonnemiles and vessel demand – especially for trading routes running West to East. With vessel supply stagnant or in decline, the basic principles of supply and demand suggested an upward trajectory for freight prices. However, the reality of 2024 did not fully align with these high expectations.

Oil demand growth

Throughout 2024, revisions from forecasting agencies downgraded global oil demand growth by approximately 400,000 barrels per day (bpd). This adjustment closely mirrored downward revisions to China’s growth forecasts, which dropped by more than half a million barrels through the year

China’s oil demand remains a key driver of tanker markets and in 2024, the impact on the VLCC sector was twofold: slower-than-expected demand growth dampened overall market activity, and increased reliance on sanctioned oil further skewed dynamics.

Approximately 2.7 million bpd of China’s seaborne imports in 2024 originated from sanctioned countries, including substantial volumes of Iranian crude. We also saw Russian crude following to China, but much of this bypassed the VLCC market, instead utilising smaller tankers. Overall, shadow fleet activity into China diverted around 20 VLCC fixtures per month from the mainstream market.

Despite these challenges, there are signs of potential recovery. In November, Chinese refiners began sourcing more non-sanctioned crude from the Middle East and West Africa. This shift reflects both increasing U.S. sanctions pressure and rising costs associated with sanctioned oil.

As we now enter 2025, agencies forecast global oil demand growth of 1.1 to 1.4 million bpd, aligning with long-term averages. This suggests that, while 2024 was challenging, the broader demand outlook remains stable.

OPEC+ vs. Non-OPEC production dynamics

OPEC+ remains a key influence, with plans to reintroduce 2.2 million bpd of voluntary production cuts over an extended 18-month period starting in April 2025. The phased return of these barrels, primarily from Middle Eastern countries, could add demand equivalent to 55 VLCCs if directed to Eastern buyers.

While OPEC+ kept voluntary cuts in place through 2024, non-OPEC production growth, particularly from the Atlantic Basin, remained robust. However, realised growth fell short of initial expectations due to slower-than-anticipated growth from Brazil and lower-than-expected US exports. Furthermore, with China not drawing as many barrels from the Atlantic Basin, Atlantic exports remained largely within the West of Suez region, leading to shorter voyages and lower tonnemile demand. Looking ahead to 2025, projected non-OPEC production growth of 1.1 – 1.7 million bpd, with the majority expected from West of Suez producers, could drive significant West-to-East oil flows, benefiting VLCC demand.

Tonnemiles and fleet development

2024 saw fluctuations in vessel demand, including an unseasonal dip in September and October, followed by a recovery in November. Overall, spot market demand ended the year around 5% below 2023 levels.

The VLCC supply side continues to be fundamentally positive:

• The orderbook remains historically low at just 80 vessels (8% of the trading fleet)
• The fleet’s average age has reached 12 years, with over 100 vessels now 20 years or older
• Over the next four years, the number of vessels exceeding 20 years will double, representing 21% of the trading fleet.

With only 80 newbuilds in the pipeline, the effective fleet size is poised to decline as older vessels become less efficient. Add to this a large pool of older, exit-ready ships, the medium-term fundamentals are promising.

Looking forward into 2025

The market dynamics of 2024 resulted from a convergence of small events that collectively enforced downward pressure on freight rates. However, the fundamentals for 2025 suggest a more optimistic outlook:

• Non-OPEC supply is projected to have strong growth, and most of this is West of Suez
• OPEC+ production is set to gradually return to the market, potentially bolstering VLCC demand
• Geopolitical challenges remain a persistent factor, contributing to inefficiencies and supporting tonne-mile demand
• Fleet constraints could lead to an effective decline in vessel availability, exacerbating market tightness.

The main wildcard remains China. Both the growth of its oil demand and its sourcing patterns will be crucial in determining the trajectory of VLCC demand. If fundamentals align, 2025 could mark a significant turning point for the freight market.

Tankers International remains cautiously optimistic; we believe that 2025 holds the potential for a market recovery driven by robust fundamentals and a balanced fleet dynamic.

Stephen Robinson, a seasoned bunker industry leader, recently joined Tankers International in a pivotal role. In this insight we delve into his vision for the future of fuel procurement, the challenges posed by decarbonisation, and how Tankers International plans to stay ahead of the curve.

What made you join Tankers International? And how do you see your previous experience translating to this role?

It feels like a full-circle moment in my career. After over 30 years in the bunker industry, starting from bunker trading and working through a variety of senior roles, I’ve developed a broad range of experience – from building physical bunker supply operations to managing large-scale Government joint ventures. I’ve had a relationship with Tankers International for 20 years supplying their vessels in key strategic ports and the TI Pool has always stood out as a well-run, highly professional operation.

This opportunity felt like a natural progression for me. I’ve always respected TI’s work and the people involved, and it’s a chance to apply my knowledge and network to something exciting. Personally, having spent over 20 years in Dubai, I was thinking about returning to the UK, but knew it would have to be for the right opportunity. This role not only allows me to apply my solid technical background in terms of physical bunker supply and fuel procurement , but also to leverage long, established relationships with many physical suppliers and industry players, which I know will be an advantage for Tankers International and align with our plans to develop new initiatives going forward.

Given the rising complexity of fuel procurement and the shift toward alternative fuels, how do you plan to leverage your established relationships with physical suppliers to support TI’s fuel strategy?

While the shift toward alternative fuels is important, I believe we need to first focus on optimising our existing approach to traditional fuels. The strategy will be to aggregate demand across the pool and use that scale to secure pricing advantages from suppliers. With the significant tonnage we handle, particularly in key markets like Singapore where I have strong relationships, we can be more creative with forward pricing and risk management, exploring opportunities beyond just looking for marginal savings from physical suppliers.

We also want to leverage these established relationships to negotiate more strategic partnerships, offering more value to the pool than just price. For instance, we can work with larger suppliers in regions like Singapore, Fujairah, and Rotterdam, ensuring we’re ahead of the curve when it comes to transitioning into new fuel technologies. Many of these suppliers are already preparing for alternative fuels, and by engaging them early, we can set up test runs and make sure our infrastructure and relationships are in place for when those volumes grow.

While alternative fuels are still relatively small in terms of the overall tonnage, we’re closely monitoring the regulatory landscape and preparing accordingly. However, my immediate focus will be on optimising the 800,000 tonnes we currently manage every year, ensuring we have the best supply strategy in place to serve both our pool members and future expansion.

In your view, how can TI gain a competitive advantage in the increasingly complex fuel landscape? What key areas should the bunker desk focus on to achieve this?

Our main competitive advantage lies in our significant buying power. In the bunkering industry, this is crucial. We have strong, well-established relationships, large credit lines, and a reputation for reliability and trust. Our partners know they can trust us to pay on time and handle substantial volumes. This trust and financial strength sets us apart, especially in a market where stability and competence are vital.

To build on this, the bunker desk will focus on leveraging our scale to negotiate better pricing, while ensuring that we maintain strong, long-term partnerships with suppliers. Our aim is to not only offer cost savings but also reliability and strategic insight, which are highly valued in the industry.

As the fuel landscape becomes more complex with the rise of alternative fuels, it will be essential for us to stay ahead of the curve by building relationships with suppliers who are already preparing for this shift. This proactive approach will position us well to offer our pool members a seamless transition into future fuel technologies.

By combining our buying power with a focus on reliability, trust, and forward-looking strategies, TI can solidify its position as a leader in the bunkering sector, both now and in the future.

As TI aims to support pool members through the decarbonisation challenge, what specific strategies or innovations do you think will be most effective in managing this transition?

Managing the decarbonisation transition will require a multifaceted approach, as it is an industry-wide issue.

Firstly, our significant fuel short in the traditional fuels arena, will transfer into the new alternative fuels markets. Our professional reputation will translate well into this new developing market. Whilst our alternative fuel volume requirements will be relatively small initially, we need to educate ourselves in these new markets now, and have already started detailed discussions with leading industry players. We aim to provide guidance and resources to help pool members navigate regulations related to emissions, ensuring full compliance with international standards.

Secondly, as the fuel landscape shifts, we need to build strategic partnerships with the suppliers who are leading the way in alternative fuel technologies. Some of our vessels have already made successful test runs with Biofuels and we are up to date with all the new regulations that will be implemented over the coming months. This proactive approach will help ensure that TI maintains a competitive advantage, ready to offer our members access to emerging fuels such as biofuels, LNG, and other low-emission alternatives as they become more widely available. Collaborating on test runs and pilot projects with these suppliers will also provide valuable insights into fuel performance and supply chain logistics.

Finally, transparency and education will be essential in supporting our pool members through this transition. By sharing knowledge on regulatory changes, fuel performance, and supply chain innovations, we can ensure that our members are well-prepared to meet both their operational needs and decarbonisation targets.

By combining our financial strength, strategic partnerships, and a forward-thinking approach, TI is well-positioned to lead the way in helping our pool members navigate the decarbonisation challenge effectively.

How do you see the future of fuel procurement evolving with the introduction of new ship technologies and stricter environmental regulations?

The future of fuel procurement is undoubtedly heading towards increased automation and digitalisation, though the shipping industry tends to adopt these changes at a slower pace, compared to other industries. There’s growing interest in online platforms that simplify fuel purchasing processes, but we’re still in the early stages of seeing a seamless, fully integrated system emerge.

At Tankers International, I’ve already noticed a significant shift towards automation, particularly in data management. While platforms for fuel procurement and blockchain-based fuel tracking are starting to appear, like the recent announcement of electronic BDNs in Singapore,  the reality is that bunkering, especially with biofuels, remains a complex process. There’s a lot of blending involved, which introduces potential issues, so a human element will still be necessary for the foreseeable future.

As stricter environmental regulations and alternative fuels come into play, we’ll see more platforms emerging that help manage everything from fuel specs to historical performance data. However, we haven’t yet seen one perfect solution that covers all these aspects seamlessly. Until then, human expertise will remain critical in navigating these complexities. I believe that as these technologies grow and mature, there will be opportunities to integrate automation without losing the important personal relationships and trust that have always been key in the bunkering business.

Ultimately, the future will be a blend of digital tools and traditional human oversight, ensuring that both efficiency and reliability are maintained as we adapt to new regulations and fuel technologies.

Read our press release announcing Stephen’s appointment here.