VLCC volumes fell as Hormuz disrupted traditional Gulf flows, but longer Atlantic-to-Asia voyages absorbed more vessel time. That has supported freight despite fewer barrels moving — but the effect could unwind quickly if trade routes normalise.
Fewer cargoes, longer voyages and higher earnings.
That has been the shape of the VLCC crude market this year, and it is a reminder that freight demand is not really measured in barrels.
It is measured in tonne-miles: cargo weight multiplied by the distance it travels. A cargo that moves twice as far ties up a ship for twice as long, and a ship that is tied up is not available for the next fixture. So volumes and vessel demand can move in opposite directions.
That is what happened after traffic through the Strait of Hormuz was disrupted. Volumes on VLCCs fell sharply, and Asian buyers shifted a much larger share of their sourcing to the Atlantic basin.
Those voyages are far longer: Galveston to Ningbo is roughly 2.6 times the distance of Ras Tanura to Ningbo. Atlantic barrels cushioned the loss rather than replacing it one for one. The market lost a large part of its cargo base without losing a matching share of its vessel demand. Estimates of the net effect differ, and distance absorbed a large share of the shortfall.
Other things mattered too. Effective supply tightened as tonnage was trapped, delayed or repositioned, and elevated rates reflect both genuine scarcity and a war risk premium. But distance is the piece that usually gets left out, because it is invisible in the barrel count.
It also matters for what comes next. BIMCO reports record crude tanker contracting this year, led by VLCCs lifting the total crude tanker orderbook to around 27% of the existing crude tanker fleet, with deliveries scheduled through 2030.
That is a largely committed gross supply pipeline, but it is not the same as net fleet growth. Around 22% of crude tanker capacity is already over twenty years old, so a meaningful share of those deliveries could be absorbed by demolition rather than added on top. Whether it is depends on freight rates, scrap prices and how long owners choose to keep ageing tonnage trading.
The tonne mile support, by contrast is committed to nothing. It lasts only while the trade pattern that created it lasts. If Hormuz normalises, Gulf barrels return to Asia on the short haul and much of that distance leaves the equation, just as new capacity begins arriving.
Iran asked ships to pay for passage through Hormuz. Now the US is proposing its own charge for providing security. The bigger concern is not the price, but the precedent: once free transit through an international strait becomes negotiable, the principle itself starts to weaken.
Oil prices are falling as the market prices a reopening of Hormuz, but tanker rates and insurance are telling a less comfortable story. Cargo is starting to move again, yet ships remain scarce and the physical system is still far from normal.
The closure of Hormuz delivered a major shock to tanker markets, but trade adapted through rerouting, longer voyages and greater vessel-day absorption.
Originally published on LinkedIn, 1 May 2026