Breakwave Bi-Weekly Tanker Report - October 20, 2026

• VLCC Supported at Record High Amid Exceptional Geopolitical Risks – Continued attacks on shipping and energy infrastructure are keeping transportation costs exceptionally high. The reported Houthi strike on Saudi Aramco's Dhahran headquarters added to concerns over regional energy security, while recent tanker incidents in the Gulf underline the persistent threats to maritime operations. At their October 12 meeting, OPEC+ ministers warned that shipping and insurance costs have now risen above one-third of commodity value, highlighting the growing burden on international oil trade. A slight correction in freight prices outside Hormuz reflects weaker cargo enquiry and reduced export volumes rather than improved vessel circulation. Meanwhile, Arabian Gulf–China freight futures have come under some downward pressure following discussions of potential US sanctions relief for selected shadow-fleet tankers, although no additional commercially available capacity has been confirmed. In the Atlantic, the earlier freight rally has lost momentum as West African cargo enquiry slowed and US Gulf rates retreated from recent highs. Brazil remained relatively more active, with Petrobras attracting increased offers as owners showed greater interest in western employment. The latest correction points to a more divided VLCC market, with weaker Atlantic cargo enquiry and greater owner competition contrasting with exceptionally high Arabian Gulf earnings. While potential US sanctions relief has weighed on freight futures, its impact on effective tanker availability remains uncertain. Continued security incidents around Hormuz also leave the durability of the recent easing in question, with no clear indication yet of sustained freight normalization.

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