On Monday October 7, Occidental Petroleum chartered the Very Large Crude Carrier (VLCC) Maran Andromeda to carry oil to South Korea for a record rate of $13.25 million that is set to depart the United States toward the end of November. The reasons for the spike in freight rates recently for VLCCs is related to sanctions imposed by the United States on China, which is causing oil shippers globally to scramble to find unsanctioned vessels to transport its crude oil.
Back in December of 2016, the United States lifted its crude oil export restrictions. This new source of seaborne cargo, changed the global tanker industry. This adjustment intensified operators focus on U.S. crude ever since. With the recent renewed sanctions targeting Iran and rising geopolitical tensions near the Strait of Hormuz. However, with the rising U.S. tanker markets, is this a positive change or is there a downside?