Overview
Tanker bookings and movements accelerated after announcement of a two-week ceasefire in the U.S.-Iran conflict, which is conditional on letting vessels transit the Strait of Hormuz. The strait is a key chokepoint, handling about 20% of global oil and liquefied natural gas shipments. The recent six-week confrontation had driven traffic there nearly to a halt and contributed to sharp increases in global energy prices.
State refiner CPC secures cargo
Taiwan’s state-owned refiner CPC has taken steps to replenish supply by booking a tanker in the Gulf expected to carry roughly 2 million barrels of crude. Taiwan Economy Minister Kung Ming-hsin told reporters in Taipei that, "If passage is possible within the next two weeks or so, it can come over." He added, "With these 2 million barrels, given that we use an average of about 150,000 barrels per day, this can provide an additional half month or more of usage. So this will help ease, and further ease, the situation."
Asian refiners are heavily reliant on Middle Eastern crude and naphtha, which account for more than half of their supply of these feedstocks used in fuel and petrochemical production. The supply disruptions from the conflict prompted governments to release strategic crude reserves, raise subsidies and impose fuel export bans to cope with shortages.
Market and shipping responses
Within hours of the ceasefire announcement, refiners, energy majors and traders raced to charter vessels to load Middle Eastern crude destined for Asia. Commodity trader Glencore chartered the very large crude carrier Asian Lion, a VLCC with capacity for 2 million barrels, at W580 on the Worldscale scale used to calculate freight rates, according to shipping sources and LSEG data. The vessel’s demurrage charge is $580,000 per day. Demurrage is the fee paid to a ship owner when loading or unloading takes longer than the time contracted for the cargo.
LSEG shipping data showed the Asian Lion is bound for the Middle East. Glencore could not be immediately reached for comment on the fixture.
Spot VLCC freight on the TD3C route has climbed markedly, more than doubling from W230 on February 27, prior to the outbreak of the conflict, LSEG data indicated. A Singapore-based trader noted that rates are expected to remain elevated due to heightened demand and war risk premia for vessels entering the Gulf, combined with a reduced pool of available ships as many reposition to the Americas to load cargoes.
Tanker movements and regional activity
Shipping data show several tankers inside the Gulf are preparing to leave. Two China-flagged VLCCs, the He Rong Hai and the Cospearl Lake, were recorded ballasting toward the Strait of Hormuz, according to LSEG. In addition, multiple tankers called at the United Arab Emirates port of Zirku late on Wednesday and early Thursday to top up with Upper Zakum crude, LSEG data showed.
Despite the chartering activity and vessel movements, some shippers remained cautious on Wednesday, requesting more clarity on the precise terms of the U.S.-Iran ceasefire before resuming routine transit through the strait. Iran, for its part, stated that the waterway remained closed to vessels voyaging without a permit. The Islamic Revolutionary Guard Corps navy released a navigational map intended to guide transiting ships around known hazards such as naval mines, the semi-official ISNA news agency reported early on Thursday.
Implications
The rapid booking of VLCC tonnage and the repositioning of vessels underscore the sensitivity of Asian refinery supply chains to disruptions in the Gulf. The conditional nature of the ceasefire means that while some cargoes may now be able to move, uncertainty remains for shipping schedules, freight costs and refinery input availability until clear, sustained passage is established.