Saudi-China VLCC Rates Hit Record $647,000 a Day as Hormuz Risk Premium Soars

August 28, 2026 at 10:30 PM2 min

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Earnings on the benchmark Saudi Arabia-to-China supertanker route surged to a record $647,000 per day on Thursday, according to Baltic Exchange data cited by Bloomberg. The rate is more than ten times the level a year ago and nearly 27% above the $510,000 reached ten days earlier. The spike comes as Persian Gulf producers increase crude shipments through the Strait of Hormuz despite the continuing Iran war, leaving exporters competing for a smaller pool of tankers willing to take the risk.

Key Facts

Benchmark Saudi Arabia-to-China VLCC earnings hit a record $647,000 per day on Thursday, according to Baltic Exchange data cited by Bloomberg.
The rate is more than ten times the level a year ago and nearly 27% above the $510,000 reached ten days earlier.
TotalEnergies CEO Patrick Pouyanne said moving a cargo through Hormuz cost about $20 million earlier this week.
A tanker traveling from Oman to China now commands roughly $220,000 per day, up from $131,000 a month ago.
Traders estimate Hormuz outflows at 6 million to 8 million barrels per day, while Goldman Sachs puts flows at roughly two-thirds of pre-war levels.

Record Freight Rates

Earnings on the benchmark Saudi Arabia-to-China supertanker route surged to a record $647,000 per day on Thursday, according to Baltic Exchange data cited by Bloomberg. That is more than ten times the rate a year ago and nearly 27% above the $510,000 reached just ten days earlier. The spike comes as Persian Gulf producers increase crude shipments through the Strait of Hormuz despite the continuing Iran war. Few tanker owners are willing to send vessels through Hormuz, leaving exporters competing for the smaller pool that will take the risk.

Hormuz Transit Costs

Producers have begun shuttling crude through the strait before transferring cargoes onto other tankers outside the Gulf, effectively creating two freight bills. TotalEnergies CEO Patrick Pouyanne said earlier this week that moving a cargo through Hormuz cost about $20 million. Tanker market participants told Bloomberg those costs have risen further since then. Even outside the strait, rates are climbing, with a tanker traveling from Oman to China now commanding roughly $220,000 per day, up from $131,000 a month ago.

Supply Chain Disruptions

The squeeze is being amplified by Houthi attacks in the Red Sea, which have forced Saudi Arabia to redirect some barrels through the Mediterranean and around Africa, adding roughly 30 days to voyages bound for Asia. Traders estimate Hormuz outflows at 6 million to 8 million barrels per day, while Goldman Sachs puts flows at roughly two-thirds of pre-war levels.