February proved to be an extraordinary month for both the tanker and bulker sectors, as escalating geopolitical tensions pushed freight markets into uncharted territory, according to Veson Nautical.Â
As explained by Veson Nautical, VLCC rates reached record highs following military actions in Iran, while Sinokor’s ongoing fleet acquisitions further tightened the supply of compliant vessels. Furthermore, TCE earnings for VLCCs on the TD3C route from the Middle East Gulf (MEG) to China were last reported at USD 423,736 per day—an unprecedented level by any historical standard.
Bulker markets also exceeded seasonal expectations, posting broad-based gains across all segments during the post-Lunar New Year recovery.
At the same time, uncertainty over U.S. trade policy cast a longer-term shadow, with the U.S. Maritime Action Plan introducing the possibility of port fees on all foreign-built vessels—an outcome with implications extending well beyond the shipping industry.
- VLCC rates reach unprecedented levels. The benchmark MEG-to-China route climbed from c.76,000 USD/day in late January to 220,000 USD/day by late February, the highest on record, driven by geopolitical developments, Sinokor’s consolidation of approximately 25% of the compliant VLCC fleet, and escalating Hormuz disruption risk.
- Heightened regional risk. Rising US, Israel, and Iran tensions impacted regional stability and left several VLCCs idling in the Gulf of Oman. With Hormuz handling around 20% of global oil exports, rates are expected to surge further as markets price in a potential shut-in of Middle East volumes. Brent crude jumped around 8% to 79 USD/bbl over the weekend.
- Sinokor dominates S&P activity. The South Korean operator acquired eight VLCCs from Dynacom Tankers in an en bloc deal and continued accumulating tonnage throughout the period, spending over USD 4 bil in total and fundamentally reshaping VLCC supply dynamics.
- Newbuilding activity surges. Total Tanker newbuilding order value reached USD 12 bil over the past three months, led by VLCC demand at Chinese yards. Greek owners placed 87 vessels worth USD 7.9 bil, a 49-vessel increase on the previous six-month period.
Bulk market highlights:
- Counter-seasonal freight market strength. Capesizes surged 25% to the mid-20,000s USD/day in late January before retreating to around 20,000 USD/day during Lunar New Year. The post-holiday recovery was broad-based, with Supramaxes jumping 12% to approximately 16,500 USD/day and Panamaxes up 4% to approximately 17,200 USD/day.
- US trade policy uncertainty. The US Maritime Action Plan proposed port fees on all foreign-built vessels calling at US ports, broader in scope than the 2025 USTR framework targeting Chinese-built tonnage specifically. The subsequent Supreme Court ruling striking down reciprocal tariffs, replaced by a flat 10% levy, has created a difficult business environment risking wider economic disruption.
- S&P market slowdown. Secondhand transaction volumes contracted sharply, with total values falling to USD 4.2 bil from USD 8 bil previously. Despite subdued activity, Capesize asset values trended upwards, with five-year-old tonnage reaching its highest levels since September 2008