Geopolitics are more complex than usual in today’s fast-moving tanker market, but two brokers have separately identified developments that could provide a boost for the VLCC market.

In their latest market reports, New York-based Poten & Partners and London’s Gibson Shipbrokers outline factors that could strengthen the VLCC market in the future. On the one hand, Poten explains why the shifting backdrop of Iranian oil sanctions could affect crude oil trade; on the other, Gibson points to possible increases in US oil exports under President Trump’s Administrations.

US sanctions on Iran have been on and off for many years, slapped on first by President Carter in 1979. Following successive on-offs during different administrations, 2015 saw Iran and UN security council members (plus Germany) agree the Iran nuclear deal, part of which was for the US and the EU to provide sanctions relief. This led to a boost in Iranian oil exports and between January 2016 and May 2018, when President Trump pulled the US out of the Iran nuclear deal, Iran exported an average of 2.5m barrels of crude oil a day. China and India were the country’s largest customers and tankers from Iran and other nations shipped the oil.

However, when the US reintroduced sanctions from 2018, Iran became dependent on the so-called ‘dark fleet’ which subsequently expanded dramatically in 2022 when Russian oil was also sanctioned. Over the last three years, the dark fleet is estimated to have grown by a factor of three or four, perhaps numbering as many as 1,000 tankers today.

Poten notes the growing influence of the US Office of Foreign Asset Control (OFAC) which monitors ships that carry oil cargoes between certain countries, including oil exports from producers Russia and Iran. Since the beginning of 2024, OFAC has steadily added tankers to the sanctions list for both countries, Poten notes, thereby reducing the pool of non-sanctioned dark vessels.

Iran has targeted China’s so-called teapot refineries, small privately-owned facilities which have been key takers of Iranian crude at discounted prices. But OFAC now has these Chinese importers in its sights and could undermine buying strategies. This could force the refineries to turn to other long-haul crude imports from other Middle Eastern or African countries, boosting demand for VLCCs trading in the open market.

Gibson, meanwhile, cites President Trump’s impact on tanker trades as another potential VLCC driver. In recent years, the broker points out, several US oil export projects to Asia went on hold, with permitting plagued by bureaucracy and climate goals. They include the Sea Port Oil Terminal (SPOT), to be located off Freeport Texas, Blue Water Texas, Texas GulfLink (TGL), and Blue Marlin.

Now, though, in Trump’s second-term, US energy producers are back on the hydrocarbon trail. The SPOT terminal’s final investment decision has been delayed but, Gibson reports, there could soon be moves to take it forward. SPOT is just one of the facilities that could be reinvigorated under the new Administration’s strategy. The impact of their development would favour the VLCC sector because the US crude exports would be shipped on long-haul trades.

 Suezmax and Aframax tankers would not stand to gain so much, Gibson suggests, although both sizes could contribute to rising exports on trades where draught constraints are a factor.