The result was a classic capacity squeeze:

1. Exporters sought ships to move crude from the Gulf.
2. Security risk removed or delayed part of the available fleet.
3. Charterers competed for the remaining vessels.
4. Owners raised their asking rates to reflect both scarcity and risk.

Insurance made the economics more uncertain

War-risk insurance added a second layer to the freight shock. Premiums had fallen from roughly 5% to 2% of a vessel’s value after the June ceasefire, according to brokers cited in reporting, but the reduction did not represent a durable return to normal conditions.

As attacks resumed, quoted premiums became highly volatile. One report put the range at approximately 3% to 10% of hull value, meaning a tanker valued at $100 million could face a war-risk premium of about $3 million to $10 million. Other reporting also described insurers as reluctant to cover voyages through waterways exposed to attack.

For charterers, this made the total cost of a voyage difficult to predict. For owners, it created a higher hurdle for accepting a Hormuz cargo: the freight rate had to compensate not only for the ship’s time and operating costs, but also for insurance uncertainty and the possibility of disruption. That narrowed the willing fleet further.

OPEC+ increases added cargo pressure

The supply side was moving in the opposite direction from vessel availability. OPEC+ agreed to raise its production target by 188,000 barrels per day from August, bringing the total increase since April to almost 800,000 barrels per day, according to Reuters.

More Gulf production does not automatically translate into an equal increase in VLCC demand: the final effect depends on where the barrels are sold, how far they travel and whether they move by alternative routes. But additional Middle Eastern crude available for export increased the potential call on tanker capacity at precisely the moment when fewer owners wanted to use Hormuz.

The pressure was also visible in rerouted and opportunistic flows. US imports of Middle Eastern crude were projected to reach about 600,000 barrels per day in August, the highest level since the war began, as a brief opening of Hormuz and the rerouting of Saudi oil through the Suez Canal redirected barrels toward American ports.

Why the benchmark became harder to read

A published freight benchmark is most informative when it reflects a deep market with many willing participants and regular transactions. The Hormuz market instead became unusually thin:

• Vessel movements were sparse.
• Insurance terms varied substantially between ships and voyages.
• Some owners avoided the route altogether.
• Charterers still needed to secure prompt crude liftings.
• Individual fixtures could reset market expectations.

That means the $510,000-per-day assessment captured genuine scarcity and risk, but it should not be treated as a perfectly representative clearing price for a normal tanker market. The Sinokor fixture’s reported influence on the benchmark, combined with the shortage of willing owners, illustrates why a small number of transactions could have an outsized effect.

The central mechanism was therefore not simply “more oil equals higher freight.” It was the collision of renewed security risk, expensive and uncertain insurance, constrained vessel participation and additional potential Gulf cargoes. Until safe transit and insurability improve together, elevated VLCC earnings can persist even if diplomatic signals temporarily suggest that Hormuz is reopening.

The result was a classic capacity squeeze:

1. Exporters sought ships to move crude from the Gulf.
2. Security risk removed or delayed part of the available fleet.
3. Charterers competed for the remaining vessels.
4. Owners raised their asking rates to reflect both scarcity and risk.

Insurance made the economics more uncertain

War-risk insurance added a second layer to the freight shock. Premiums had fallen from roughly 5% to 2% of a vessel’s value after the June ceasefire, according to brokers cited in reporting, but the reduction did not represent a durable return to normal conditions.

As attacks resumed, quoted premiums became highly volatile. One report put the range at approximately 3% to 10% of hull value, meaning a tanker valued at $100 million could face a war-risk premium of about $3 million to $10 million. Other reporting also described insurers as reluctant to cover voyages through waterways exposed to attack.

For charterers, this made the total cost of a voyage difficult to predict. For owners, it created a higher hurdle for accepting a Hormuz cargo: the freight rate had to compensate not only for the ship’s time and operating costs, but also for insurance uncertainty and the possibility of disruption. That narrowed the willing fleet further.

OPEC+ increases added cargo pressure

The supply side was moving in the opposite direction from vessel availability. OPEC+ agreed to raise its production target by 188,000 barrels per day from August, bringing the total increase since April to almost 800,000 barrels per day, according to Reuters.

More Gulf production does not automatically translate into an equal increase in VLCC demand: the final effect depends on where the barrels are sold, how far they travel and whether they move by alternative routes. But additional Middle Eastern crude available for export increased the potential call on tanker capacity at precisely the moment when fewer owners wanted to use Hormuz.

The pressure was also visible in rerouted and opportunistic flows. US imports of Middle Eastern crude were projected to reach about 600,000 barrels per day in August, the highest level since the war began, as a brief opening of Hormuz and the rerouting of Saudi oil through the Suez Canal redirected barrels toward American ports.

Why the benchmark became harder to read

A published freight benchmark is most informative when it reflects a deep market with many willing participants and regular transactions. The Hormuz market instead became unusually thin:

• Vessel movements were sparse.
• Insurance terms varied substantially between ships and voyages.
• Some owners avoided the route altogether.
• Charterers still needed to secure prompt crude liftings.
• Individual fixtures could reset market expectations.

That means the $510,000-per-day assessment captured genuine scarcity and risk, but it should not be treated as a perfectly representative clearing price for a normal tanker market. The Sinokor fixture’s reported influence on the benchmark, combined with the shortage of willing owners, illustrates why a small number of transactions could have an outsized effect.

The central mechanism was therefore not simply “more oil equals higher freight.” It was the collision of renewed security risk, expensive and uncertain insurance, constrained vessel participation and additional potential Gulf cargoes. Until safe transit and insurability improve together, elevated VLCC earnings can persist even if diplomatic signals temporarily suggest that Hormuz is reopening.