The source at the bottom of the article lists as Baltic Exchange -that’s the entity that established and defines the major shiiping routes for a variety of vessel types. The route for TD3C Midlle East Gulf region-to-China is quoted aa TCE (Time Charter Equivalent) of > $1.2M daily. (just for reference, fuel is not included in TCE, and vessel operating cost (again, excluding fuel) is around $10,000 daily). The quoted Gulf of Oman-to-China route was quoted at $870K daily. US Gulf-to-China (TD 22)with a long travel time time round trip quotes @ > $50M
Just one TD 22 trip would be enough to cover the vessel for at least three years of typical hire.
So with the tanker market, it is a mix of time-charter and spot rates. Prior to this year, the longer term VLCC time charters (10 years) are generally fixed $28,000 - $35,000 daily. Depending on how the market is behaving, medium term VLCC charters (3 - 5 years) probably $35K - $45K daily. Spot rates can vary throughout the year lows $20K daily - $200K daily. In a typical year, the chances of getting back-to-back $100K VLCC spot rates are extremely rare. At the start of 2026, tanker biggie Frontline (FRO) opted to fix 7 VLCC each on 1-year time charters of over $77K daily. After US attacked Iran, FRO was adding $110K 1-year charters on a regular basis. When Frontline reported Q2 2026 results, they mentioned fixing vessels on multi-year time charters (2 years and 3 years). In both cases, the first year was $110K daily. Tanker peer DHT has also been adding single year and multi-year charter coverage A very evolving market. But the tanker owners who have been around know that passing up on a chance to fix some of their VLCCs at above average consistent rates is a great de-risk/hedge move (Edit: I said that wrong. I meant, in an exubriant market, a smart owner opts to de-risk some
BTW, these vessel owners have one of three behaviors when it comes to dividend payouts
Pay dividends according to debt levels - sliding scale that is inversely related to debt e.g. TRMD, HAFN, INSW
Pay very low dividend regardless of market e.g. NMM, TNK
Take care of operational cost and financing costs, then any excess is paid out as dividend. In good times, that’s a hefty payout. In bad times, that’s as low as zero. e.g. DHT, NAT, FRO
Frontline’s main backer (Johan Fredriksen) timed his newbuild VLCC expansion well. He placed 9 VLCC orders a few years back. 6 of 9 vessels have delivered this year with one or two more in 2026. At least 4 of the new VLCCs have been fixed at rates over $110K daily for year 1. Dynacom is a Greek owned shipping entity. Its primary owner, George Prokopiou, has orders for over 22 VLCCs. The crude tanker side is mostly a private entity, so I don’t know what the chartering strategy looks like. But, to the earlier point, if the vessels deliver in 2027 - 2028, the vessels could deliver to a very different market environment.
When rates go into such a frenzy, then related stuff e.g. vessel pricing goes into a similar wackiness. Report from a shipping broker (Carriers) from yesterday. Three VLCCs each 14 - 16 years old, each selling for $130M - $135M (page 1, first three tanker entries). Scroll a little further down. That entity I mentioned earlier, Dynacom, has placed an order for 2 new VLCCs @ $123M each, delivering in 2029.
But, understand what that is saying - a relatively old 14 - 16 yo VLCC available today is worth more than a spanking new VLCC delivering sometime in 2029!
Lines #4 - #6 are old Suezmax vessels. Older vessels, good deal for the sellers (a new Suezmax likely between $87M - $100M). While the Suezmax spot rate is higher currently, I don’t think the jump is similar in magnitude to the VLCC rates
With the word “useful” in the query, that’s a little tricky to answer. As a regular crude carrying vessel, maybe 16 - 17 years. Beyond that, the vessel might still find employment in other functions e.g. long term storage, temporary storage, oil production, etc. Currently, there’s probably some 20 yo VLCCs and Suezmax carrying crude in non-sanctioned trades i.e. Russian oil
Forgot about the second question. The primary difference between newer VLCCs and older VLCCs is the fuel efficiency. All else being equal, a charterer will prefer a newer VLCC (0 - 10 years old) vs older VLCC because the newer VLCC is more fuel efficient and meet environmental requirements with less problems. If a newer VLCC also has a scrubber installed, the charterer will opt for that vessel because that vessel uses cheaper fuel and the scrubber ensures the vessel is below emission thresholds. The same reasoning works down the vessel categories.
Thank you for the kind words.
Over the years, the management team at Frontline have provided some great background into the tanker market. Though Frontline (FRO) is my favored tanker and shipping company it isn’t my largest tanker position. That said, I did add to my FRO stake this week. Some of the thoughts shared in this thread were the motivating factors in the decision.