The situation in the Middle East may further increase the risk premium for oil transportation, trend of VLCC daily rental rates is causing concern.

The political situation in the Middle East is tense, which may further increase the risk premium. Recently, the oil shipping market has been booming, exacerbated by geopolitical unrest. VLCC daily charter rates have surged, surpassing $200,000 per day. "The geopolitical factors may make it difficult for market rates to effectively rebound." Wu Jialu, Chief Analyst at Citic Futures, told Caixin reporter that we need to continue monitoring the intensity and sustainability of the tension between Israel and Iran, as well as whether the Strait of Hormuz can remain open. According to data from the Baltic Exchange, as of February 26, the BDTI (Baltic Dirty Tanker Index) VLCC TD3C route TCE (time charter equivalent) was reported at $209,000 per day, reaching a new high since April 2020. Wu Jialu analyzes that on the one hand, demand is generally robust, with strong demand for long-haul routes. Expectations of rising oil prices may drive forward import demand, but we need to pay attention to the reverse inhibitory effect of high oil prices on demand. On the other hand, on the supply side, apart from long-term factors such as slow growth in VLCC capacity, aging vessels, and short-term factors such as the continuous increase in sanctioned tanker sizes and high oil storage capacity, the market supply has also decreased marginally. Looking at the market capacity situation from the supply side, data provided by Clarkson Research shows that as of early 2026, VLCC fleet over 20 years old accounts for about 20%, while those over 15 years old account for 42%. The delivery volume of fleets in 2026 will increase compared to 2025, with a year-on-year fleet growth of 3.2%. At the same time, driven by the hot freight market and active trading, second-hand tanker prices continue to rise. By the end of February, Clarkson's second-hand tanker price index had risen by about 9% compared to the beginning of the year, with prices of 10-year-old VLCC tankers rising by over 20%. As a result, A-share shipping sector companies such as COSCO Shipping Energy Transportation (600026.SH) and China Merchants Energy Shipping (601872.SH) have seen their market capitalization surpass a trillion, with the former's stock price rising by 21.4% since the Spring Festival, and the latter rising by 33.2%. It is worth noting that the market is currently concerned about a possible blockade at the Strait of Hormuz. As for its impact, please refer to: Rising Freight Rates in the Oil Shipping Off-Season: Another Maritime "Throat" Blocked? In addition to the oil shipping market, in the container shipping market, industry insiders and freight forwarders told Caixin reporters that prices on Middle East routes are expected to rise due to the impact of the Middle East situation. At the same time, there are reports that the Houthi rebels will resume attacks on the Red Sea shipping lanes. On February 27, Maersk, a major shipping company, announced that due to unpredictable operating conditions in the Red Sea region, they have temporarily adjusted some voyages on the ME11 and MECL routes, diverting them around the Cape of Good Hope. Earlier in mid-January, Maersk had announced the resumption of the MECL route through the Suez Canal. This article is reproduced from "Caixin." Editor: Liu Jiayin.