SPOT rates for tankers loading in Yanbu in the Red Sea have surged due to the threat of Houthi attacks and higher insurance premiums.

The heightened risk of Ukrainian attacks in Novorossiysk has propelled spot rates for suezmaxes loading in the Black Sea to peak levels.

The threat of Iranian attacks has brought tanker transits through the Strait of Hormuz back to a trickle. Spot rates for very large crude carriers in Atlantic load ports are rising again.

All of this is happening at once, and the various tanker markets are interacting with each other.

For now, the rising complexity of global crude supply chains and the inefficient use of tanker tonnage is a positive for rates.

But there is also a countervailing headwind: seaborne crude available for export is declining, with volumes headed back towards lows seen after the Hormuz crisis first began.

The “miles” in the tonne-mile equation may be rising, but the “tonnes” are falling.

VLCC and suezmax spot rates

Tankers continue to load in Yanbu despite the Houthi threat but fixtures are becoming much more expensive for charterers.

Clarksons Securities said on Monday that Yanbu-Asia VLCC spot rates have risen to $230,000 per day, up from $165,000 per day on July 22.

Yanbu VLCC fixtures had previously been at parity with Oman loadings, said Clarksons. The Baltic Exchange’s Oman-China VLCC time-charter equivalent index was at $101,702 per day on Monday, less than half the Yanbu rate, highlighting the risk premium of loading in Yanbu due to Houthi attacks.

More crude from Yanbu is avoided the Bab el Mandeb Strait and taking the northern route to Egypt, where it can transit the Suez Canal if loaded on suezmaxes or, if loaded on VLCCs, can be unloaded in Ain Sokhna, Egypt, then transported to the Mediterranean side via the SuMed pipeline, and reloaded on VLCCs or suezmaxes in Sidi Kerir.

“Initial soundings from shipowners plus preliminary ship tracking data suggest that almost all ships loading in Saudi ports on the Red Sea are opting to head north towards the Mediterranean,” said brokerage BRS said on Monday.

If more Yanbu crude exports go northward on the Egypt route, Clarksons believes that more Yanbu cargoes will ultimately flow to European buyers, and more Atlantic basin cargoes that previously went to Europe would head to Asia, a positive for VLCC tonne-miles.

But the biggest geopolitical gainer in tanker trades recently is not the VLCC market due to Middle East unrest. It is the suezmax market due to the Russia-Ukraine war.

The Baltic Exchange’s short-haul Black-Sea Mediterranean suezmax TCE index shot up to $253,728 per day on Monday, its highest level since April 15.

This index surged 25% versus Friday and is up 44% month on month.

“It was an unprecedent week for the CPC [Caspian Pipeline Consortium] suezmax market in the Black Sea and Mediterranean,” wrote Gibson Shipbrokers on Friday.

“Drone strikes around the Novorossiysk area have severely disrupted operations, with CPC calls now viewed as high risk and a number of owners unwilling to berth.”

Loadings from the CPC pipeline in the Black Sea resumed on Monday, according to Reuters. That resumption coincided with the index spike.

Connecting the geopolitical dots

Everything is connected in ocean shipping.

The post-March jump in exports from Yanbu was driven by the Iranian blockade of Saudi Arabian exports via the Strait of Hormuz. The recent shift in Yanbu exports towards Egypt due to Houthi attacks will, in turn, have implications for the suezmax market in Europe.

VLCCs could shuttle Yanbu crude to Ain Sokhna, then go back for more, and different VLCCs could load in Sidi Kerir in the Mediterranean for the voyage to Asia. Clarksons noted that the voyage from Sidi Kerir around the Cape of Good Hope is roughly the same distance as the voyage from the US Gulf to Asia.

But there are two problems. First, this will create a bottleneck, as the SuMed pipeline in Egypt has capacity of 2.5m bpd versus recent Yanbu loadings that have averaged 3.8m bpd.

Second, there is limited ballast VLCC availability to load on the Mediterranean side of Egypt. “West-of-Suez VLCCs ballaster availability is sitting at a thin 74 units, roughly 10% of the mainstream fleet,” said Gibson.

Another option is for VLCCs loading in Yanbu to partially unload in Ain Sokhna to bring draught down to levels that allow for a VLCC Suez Canal passage, then top off at Sidi Kerir before heading to Asia around the Cape of Good Hope.

The issue here is the cost in terms of time (unloading and reloading) and the financial cost due to pipeline and canal transit fees.

One workaround: the time and expense of unloading at Ain Sokhna can be avoided by only partially loading VLCCs in Yanbu.

“Several VLCCs have part-loaded at Yanbu and headed through the Suez Canal to Sidi Kerir. This implies that these will be topped up by SuMed barrels and sail to Asia,” said BRS.

Yet another solution is to shift to Yanbu loadings with suezmaxes, which are less efficient from an economies-of-scale perspective for voyages to Asia, but can effectively bring Yanbu crude to Europe and can pass through the Suez Canal.

That would impact Atlantic suezmax rates.

“While most suezmaxes are concentrated in the West and could theoretically position to the Red Sea quickly, Atlantic basin demand has been exceptionally strong,” said Gibson. “Pulling suezmaxes away from Western trades to position into Yanbu could tighten effective supply in the Atlantic.”

The positive for rates is that the Houthi threat in the Red Sea could create incremental demand for suezmaxes loading in Yanbu. The negative is that more crude from Yanbu to Europe on suezmaxes would supplant existing suezmax demand from markets such as the Black Sea.

Meanwhile, the dual Houthi and Iranian threats in the Middle East are having repercussions in the Atlantic VLCC markets.

On one hand, more VLCCs ballasting around the Cape of Good Hope could be pulled past West Africa into the Mediterranean towards Sidi Kerir, supporting Atlantic basin rates. On the other, fewer VLCCs could wait outside the Middle East Gulf due to the effective reclosure of the Strait of Hormuz by the Iranians, and ballast to the Atlantic instead.

Geopolitical events have been positive for Atlantic basin VLCC rates over the past week.

The Baltic Exchange’s US Gulf-China VLCC TCE index was at $109,176 per day on Monday, up 15% from the recent low on July 22. The West Africa-China VLCC index was at $101,702 per day, up 21% versus July 22.

Seaborne crude volumes are falling back

The worsening geopolitical chaos implies upside for VLCC and suezmax rates due to inefficiencies.

But there is a negative: the volume of crude loaded on tankers globally is declining after an initial rebound, and the Hormuz crisis looks no closer to being resolved than it was five months ago.

Lloyd’s List analysed seaborne weekly crude export volume data from Vortexa over a one-year period, comparing the pre-Hormuz crisis average (the weeks ending July 27, 2027-March 8, 2026) to the crisis period average (the weeks ending March 15-July 26).

The data was as of Monday, and is subject to revisions, particularly for the most recent weeks.

The Vortexa data shows that weekly global crude and condensate exports have averaged 37.7m barrels per day since the crisis began, down 6.1m bpd or 14% versus pre-crisis, despite the positive effect of higher exports from Yanbu, Fujairah and the US.

The global average for the week ending Sunday came in at 33.6m bpd, 11% below the crisis-period average, due to a drop-off in volumes via the Strait of Hormuz coinciding with lower US exports.

According to Vortexa data, crude and condensate volume passing eastbound through the Strait of Hormuz has averaged 3m bpd since the crisis began, down 12.2m bpd or 80% versus pre-crisis.

Last week’s outbound flows through the strait were the lowest since the week ending May 31, at 2.9m bpd.

Yanbu crude and condensate exports have averaged 3.8m bpd during the Hormuz crisis, up 3m bpd or 371% versus pre-crisis. Exports last week did not collapse due to Houthi threats. They came in at 3.4m bpd, down 12% versus the week before.

Fujairah is the other main workaround for the Strait of Hormuz. Crude and condensate exports from Fujairah have averaged 1.9m bpd since the crisis began, up 754,000 bpd or 66% versus pre-crisis.

Outside of Middle East alternatives, the main driver of incremental global crude supply has been the Atlantic basin: the US, Brazil and Guyana (West Africa has been flat). These three countries have increased exports by a combined 978,000 bpd vs pre-crisis, with most of the gains from the US.

US crude and condensate exports have averaged 4.6m bpd during the Hormuz crisis, up 818,000 bpd or 22% versus pre-crisis.

The problem for tanker demand is that US exports are pulling back. Last week, US crude exports totalled 3.1m bpd, down 32% versus the Hormuz crisis average.

The global crude shortfall would have been much more painful for consumers if not for China. Most of the supply loss due to the Hormuz crisis has been counterbalanced by reduced flows to China.

China has imported 6.5m bpd of crude and condensate since the week ending March 15, down 4.6m bpd or 42% versus pre-crisis, according to Vortexa data.

The hope of tanker owners is that China will aggressively come back to the market, boosting spot rates. This hasn’t happened yet.

There was a modest rebound in June, at a time when oil prices dropped amid the US-Iran peace MoU. But with the resumption of hostilities, which pushed pricing back up, crude exports bound for China have pulled back again in July.

In the latest week, global exports bound for China averaged 5.7m bpd, down 12% from the crisis period average.