Extremely tight VLGC supply pushes freight rates to 2.5-year highs

According to intelligence services and data provider Anfil Gas, congestion at the Panama Canal, combined with sharply higher auction slot fees, is forcing more vessels to take the longer route via the Cape of Good Hope (COGH).

In particular, nine very large gas carriers (VLGCs) that loaded cargoes from the US Gulf Coast (USGC) are currently heading to the Far East via the COGH route. By comparison, seven vessels followed this route in the first quarter, and only 10 did so across the whole of 2025.

“At the same time, more than 25% of VLGCs ballasting from the Far East to the USGC are now routeing via the Cape of Good Hope,” Anfil Gas said.

Supply constraints appear to be widespread. Anfil Gas data shows that of the current in‑water VLGC fleet of 424 vessels, approximately 100-110 are unavailable for mainstream trading, either due to involvement in Iranian trade, use as floating storage, or drydocking.

This leaves roughly 320 vessels available to lift around 100 cargoes per month from USGC terminals.

“When you add the fact that around 20% of USGC cargoes are now heading to southeast Asia and India via the Cape of Good Hope, alongside continued delays at the Panama Canal, it is clear that shipping supply will remain tight,” the firm noted.

Anfil Gas added that if the Middle East Gulf does not re‑enter the market soon, some relief could come from utilising Indian‑controlled VLGCs operating westward, together with the gradual delivery of newbuild vessels.

Freight rates move higher

With shipping supply extremely tight, Anfil Gas estimates only around four VLGCs are available for end‑May loading, with a further eight vessels open for USGC loadings in the first 10 days of June.

As a result, the BLPG3 route (US Gulf to Japan) rose sharply between 13 and 17 April, reaching US$230 per tonne levels last seen in November 2023.

Meanwhile, the BLPG1 route (Middle East Gulf to Japan) increased to US$160 per tonne on 17 April. A handful of fixtures for loadings from Saudi Arabia’s Yanbu terminal helped keep the market active, pushing rates to their highest level since September 2023.

In the broader Middle East Gulf region, including the Arabian Sea and India, Anfil Gas data shows that around 45 VLGCs remain idle in ballast.