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A dip in tanker rates has improved the price outlook for U.S. crude this month, as it signals stronger demand. However, the relief may not last too long as most tanker market forecasts for the year still see rates much higher than they were in 2025.

“The shipping markets are freeing up, and rates are tanking from the US to Asia, and the UK to Asia,” one analyst from financial services provider TP ICAP told Bloomberg this week, adding that the trend was boosting demand for U.S. crude oil.

As a result, local U.S. benchmark prices have rebounded, although high-sulfur grades remain pressured following President Trump’s statement that the U.S. will be taking millions of barrels of Venezuelan crude.

The general freight rate situation, however, remains inflated. The reason is rising supply, both from OPEC+ and from the United States, which has tightened the availability of tankers. Last year, this situation resulted in half a dozen new Very Large Crude Carriers making their maiden journey empty, rather than loaded with gasoline, which is standard practice. The reason they traveled empty was to pick up crude cargoes and collect the soaring daily rates.

The unusual strength at the end of the year has seen oil tanker rates on the key shipping routes surge by 467% year to date, according to Bloomberg estimates released in December and based on data from the Baltic Exchange and commodity markets data provider Spark Commodities.

Also last month, Lloyd’s List reported a sudden nosedive in tanker rates on the Baltic Exchange, with VLCC rates shedding 20% between December 19 and December 22. However, rates remained “the highest since the tail end of spring 2020 floating storage boom,” at $83,882 per day. The freight rates for smaller tankers also remain strong, Lloyd’s List noted in its report.

Some of the tanker rate surge was attributable to the U.S. sanctions on Russian Rosneft and Lukoil that entered into effect in late November. Tanker rates rose in anticipation of a squeeze on the fleet that Russia was using to transport its oil. This week also provided support for tanker rates after the United States chased a Russian-flagged tanker across the ocean and finally captured it in the North Atlantic. The vessel, Bella 1, is under U.S. sanctions. However, its seizure by the U.S. forces indicates intensification of geopolitical tensions, which, combined with the limited availability of tankers, will likely keep freight rates elevated.

Meanwhile, supertanker fleet utilization rates are expected to hit the highest in seven years in 2026, at 92%, which compared to 89.5% last year, a Jefferies analyst said in December. The utilization rate refers to the number of tankers hired out as a percentage of all tankers on the market.

Another factor that will drive tanker rates higher is sanctions. The more tankers the United States imposes sanctions on, the fewer tankers remain available to move crude across the globe, Reuters noted in a mid-December report. Last month, sanctions and higher demand for tankers from OPEC+ drove freight rates all the way to $130,000 per day, and while since then rates have subsided, they are still higher than they were a year ago. There is also the factor of tanker aging, the report noted, which is limiting tanker availability and supporting higher rates. More and more tankers are being dropped by oil companies once they turn 15 as safety requirements get more stringent. Close to 44% of the global tanker fleet is 15 or older. Of that 44%, 18% are under sanctions, according to tanker major Frontline. With so many factors reducing the availability of tankers, rates, while lower, are likely to remain far above year-ago levels unless demand for oil declines, which is only likely in the case of a price jump.

By Irina Slav for Oilprice.com