Geopolitical risk disconnects VLCC freight from demand

AI Summary

Freight rates for Very Large Crude Carriers (VLCC) have softened with decreased demand and increased ballast fleet in the Middle East Gulf, yet freight pricing has not uniformly responded to these market changes. This disconnect highlights ongoing geopolitical risks affecting shipping fundamentals in the region.

VLCC fundamentals have softened from the tighter conditions seen earlier this year. Active VLCC tonne mile demand declined in August, while the ballast fleet increased as more vessels completed laden employment. Yet freight has not responded uniformly to the resulting increase in potential supply. The disconnect is most pronounced around the Middle East Gulf. Ballast ...