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Lead VLCC indicator Frontline reshapes fleet in firming market
It is often said that Frontline is a lead indicator for VLCC sale and purchase, and its latest move comes during an attractive window of opportunity: others are likely to follow
Frontline agrees a package of VLCC sales and newbuilding purchases valued at about US$2.0Bn, combining the disposal of older ships with fleet renewal during a relatively firm earnings period.
Frontline agreed to divest eight VLCCs built in 2015–2016 for US$832M, with deliveries to the buyer scheduled for Q1 2026, in a firmer VLCC sector, which Clarksons’ Shipping Intelligence Weekly noted firmed in early January, with “stronger activity in the MEG” reigniting VLCC rates after the Christmas lull.
It put fleet-weighted average VLCC earnings up 45% week-on-week at US$63,608 per day.
In its crude tanker commentary, Clarksons noted, “The market has shown real strength this week,” adding “the cargo tally” is building and “the list of owners refusing to offer out” is growing.
On its route assessments, Clarksons recorded the MEG–China VLCC benchmark at WS 77.5 at week end, up 24 points week-on-week, while WAF–China rose 15.5 points to WS 77.5.
Xclusive Shipbrokers linked recent VLCC earnings strength to longer-haul crude movements and a constrained pool of “tradable” ships.
In a January note, it said, “Earnings surged past US$100,000 per day,” as barrels travelled farther and remained “on the water” longer, tightening the supply-demand balance.
In the same analysis, it argued sanctions continue to remove capacity from mainstream trading, estimating “about 100 VLCCs” are officially sanctioned and “roughly 100 more” had carried sanctioned barrels, leaving “around 23% of the global VLCC fleet” outside normal market participation.
For older crude tankers, recycling values remained a reference point for downside economics.
A GMS weekly note said owners with “vintage tonnage and surveys due may look to test the market again as levels hover around the US$400 per ldt mark,” with indicative tanker pricing in Bangladesh at US$420 per ldt.
Video: A sail around 2015-built VLCC Front Dee (source: Captain Bob)
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