By Eirini Diamantara & Dimitris Roumeliotis
The first half of January reminded everyone that crude tankers do not need a fresh demand miracle to re-rate, they just need the map to change. Baltic Exchange TCEs captured that shift almost day by day. VLCC earnings slid from USD 62,929/day on 24 Dec to a low of USD 37,869/day by 6 Jan, before turning sharply higher to USD 97,323/day on 15 Jan, a 157% rebound from the early-month trough. Suezmaxes followed the same path but with more bite: from USD 92,551/day pre-Christmas down to USD 63,485/day on 7 Jan, then up to USD 107,826/day on 15 Jan. That last move matters: the 15 Jan jump was +32% day-on-day, the biggest daily rise since 12 Oct 2023, and it pushed the index to the highest level since 19 Dec 2022. Aframaxes were steadier, dipping to USD 48,282/day on 5 Jan and grinding up to USD 62,843/day by 15 Jan, but even there the direction was clear once the rally started.
So what changed? Start with Venezuela. The US is now effectively controlling the marketing of Venezuelan crude and claims realised prices are already roughly 30% higher than under the previous regime. Whatever one thinks politically, commercially this creates a strong incentive to restore volumes, normalise liftings and pull barrels back into more “visible” trading channels. The immediate shipping signal is already showing: roughly 10 Aframax-size LR2 units have reportedly switched from clean to dirty employment in anticipation of more Venezuelan crude liftings. A useful rule of thumb shared by market participants is that every incremental 1 mb/d of Venezuelan production could translate into demand for around 23 Aframax/LR2 tankers. Add the naphtha leg, US exports to Venezuela to dilute heavy crude, and you get activity on both dirty and clean maps, but with one key consequence: more competition for the same pool of prompt, mainstream tonnage.
At the same time, Russian flows look shakier at the margin. Seaborne crude exports in 1–15 Jan are reported lower than December levels, while Indian intake has fallen sharply versus last month as refiners lean back ahead of the EU’s 21 Jan restriction on importing fuels made from Russian crude refined in third countries. Layer on a lower price cap from early February and the market’s real issue becomes friction: compliance, insurance, routing and counterparty risk. Even when barrels still move, they do not move “smoothly”, and that operational drag tightens effective supply for the conventional fleet.
Finally, VLCCs are getting a structural push from within. Longer-haul Atlantic barrels moving into Asia help, but so does consolidation: when a larger slice of a ~900-ship fleet sits under fewer hands, owners can manage exposure more deliberately, while charterers increasingly try to control ships directly to protect optionality. Put simply, utilisation stays high not because the world suddenly discovered more oil, but because availability, the right ship, in the right place, with the right paper, became the constraint.
This week’s tape is saying one thing: the market is pricing a narrower set of workable options. If Venezuelan exports accelerate while Russia-related compliance tightens again, January’s spike may end up looking less like a blip and more like a reset of the floor.
Data source: Xclusiv Shipbrokers Inc.