The daily rates for chartering a vessel to transport commodities have surged this year, with oil tanker rates skyrocketing by 467%, as shippers of a growing commodity supply are grappling with a series of route disruptions and sanctions.
Despite the typically weaker commodity demand period toward the end of each year, the last weeks of 2025 don’t show any weakness in the vessel rates for transporting crude oil, LNG, iron ore, or wheat.
The unusual strength at the end of the year has seen oil tanker rates on the key shipping routes surge by 467% year to date, according to Bloomberg’s estimates based on data from the Baltic Exchange and commodity markets data provider Spark Commodities.
LNG tanker rates have soared fourfold, while the daily rates for vessels shipping iron ore have more than doubled year to date, the data showed on Thursday.
At the end of November, supertanker rates on the route between the Middle East and China hit their highest in five years as traders sought alternatives to Russian crude after the U.S. sanctioned Russia’s biggest oil producers and exporters, Rosneft and Lukoil. Rates for smaller tankers have also shot up as traders turn to all available vessels to transport crude.
Tanker rates have been climbing for over a month amid sanction-related disruptions that led to a surge in oil in transit.
In the LNG freight market, spot charter rates to hire an LNG tanker on the U.S. to Europe route have jumped to their highest level in two years as soaring American exports tighten the Atlantic LNG vessels market.
In addition, shippers continue to be careful and many still avoid the Red Sea route due to Houthi activity, which adds weeks to voyages for the vessels.
While the tanker owners and operators reap handsome profits, they know the market is inefficient right now.
Asked to forecast the freight market in the first quarter of 2026, Lars Barstad, CEO of supertanker fleet operator Frontline Management, said on the company’s earnings call two weeks ago, “you’re asking me to give my view on one of the world’s most volatile markets. Actually, the fact that it is this volatility tells you that this is not an efficient market.”
“We’re not seeing any kind of weakness in this market. We’re seeing an old-school, extremely tight physical shipping market,” Barstad said.
“But of course, who knows what can happen next week?”
By Charles Kennedy for Oilprice.com
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