Iran-related tensions drive VLCC charter rates and ship values soaring

Geopolitical turbulence around Iran and disruptions in the Strait of Hormuz have sharply limited the number of VLCCs that can be deployed for commercial trade, forcing longer voyages and tying up more vessels. As a result, charter rates reported by the Baltic Exchange climbed from around $272,000 in August to close to $450,000 in the first half of September. This environment has lifted the resale values of used VLCCs: five-year-old ships rose roughly 19%, ten-year-old units about 32%, and fifteen-year-old vessels jumped nearly 62% within two months.

Xclusiv Shipbrokers recorded 103 VLCC transactions this year, with a pronounced shift toward older vessels; 43 were aged 11-15 years and 32 were 16-20 years old, while only five were under five years. Owners are reluctant to sell at low prices because even older ships can generate strong cash flow at current charter levels, though prolonged geopolitical tension could eventually correct rates and values.