Tanker Freight Rates: What Changes? (World Briefing 10/28)

Oil got slightly cheaper, but moving it is still close to record cost. Brent fell 1.67% to $113.88 a barrel on 27 October on hopes for the Tehran talks, yet a VLCC (very large crude carrier) from the US Gulf to China still cost about $60 million per voyage on 22 October, more than seven times the pre-war five-year average of under $8 million before the conflict began in February. The same week, the US proposed extending its pause on China-linked port fees to 9 January 2027, and China published draft rules on trade secret protection aimed at foreign entities.

Key points

• Oil: after Saudi, Turkish and Pakistani officials met Iranian leaders in Tehran on 26 October, Brent settled down $1.93 (1.67%) at $113.88 on 27 October and WTI at $99.90 (Reuters).
• Tanker rates: the US Gulf-China VLCC rate hit $79.6 million earlier in October and was near $60 million on 22 October (Baltic Exchange figures reported by the Straits Times). Valero puts the cost at $30-35 a barrel, against about $5 in 2025.
• US port fees: USTR proposed extending the suspension of port fees on China-linked vessels from 10 November through 9 January 2027. Comments close at 5 p.m. ET on 30 October.
• China trade secrets: MOFCOM released its draft Special Provisions on Protecting Chinese Trade Secrets on 26 October. Comments close on 24 November.
• EU parcels: a €2 handling fee per customs item starts on 1 November. See the 10/27 briefing.

Main stories

Why are freight rates high when oil prices fell?

Different forces drive them. Oil prices reacted to diplomacy, while tanker rates rose because attack risk around the Strait of Hormuz and ship-to-ship (STS) transfers in the Gulf of Oman are tying up ships.

Reuters reported that October was the worst month for attacks on commercial shipping in and around the strait, and Brent topped $117 last week. UBS expects Brent near $110 through year-end. Breakwave Advisors said on 23 October that US Gulf-China VLCC rates had eased to $452,000 a day (about $29 a barrel) from their peak two weeks earlier, but remain at all-time highs outside the recent extremes.

Sources: Reuters (via Investing.com), Breakwave Advisors

Are Asian refiners buying less US crude?

Yes. Traders cited by Bloomberg said Asian orders of US crude for November delivery fell about 50% from September to 24-26 million barrels. With freight above $30 a barrel, buyers are turning to closer Middle East grades and other alternatives.

Sources: Straits Times, OilPrice.com

When could US port fees on Chinese ships return?

Not before 9 January 2027 if the USTR proposal is adopted. The current pause ends on 9 November, and the extension would cover fees on Chinese-owned or operated vessels, Chinese-built vessels and foreign-built car carriers, plus duties on Chinese ship-to-shore cranes and cargo handling equipment.

It is still a proposal. USTR has also not said whether fees would resume at October 2025 levels or at the higher rates scheduled for 2026.

Source: Federal Register, USTR-2026-0694

Who does China’s trade secret draft target?

Foreign companies, organisations and individuals that MOFCOM finds have infringed Chinese trade secrets in a way that threatens China’s sovereignty, security or development interests. The draft lets MOFCOM take measures against them, so it reaches further than a general trade secret law.

MOFCOM could restrict or ban their China-related trade in goods and technology, block new investment, bar entry of staff, revoke work and residence permits, and impose fines. Companies with technology partnerships or joint development in China should review their confidentiality clauses.

Sources: MOFCOM notice, National Law Review

What it means for importers and exporters

• Freight and fuel: high tanker rates can feed into bunker prices and fuel surcharges. Check rate-adjustment clauses in long-term contracts and the validity of quotes (Incoterms 2020 summary).
• US-bound cargo: if your carrier uses China-linked vessels, cover in your contract the chance that fees reach freight after 9 January.
• Technology deals with China: define the scope and permitted use of confidential information clearly in contracts.
• Selling into the EU: finish product classification before the 1 November handling fee (10/27 briefing).

Check now: current quotes and validity on key lanes, carrier fuel surcharge notices, and confidentiality clauses in China technology contracts.

The next day’s update continues in the 10/29 briefing on the Hormuz Sinokor warning.

FAQ

What does a $60 million VLCC voyage mean per barrel?

A VLCC usually carries about 2 million barrels. Valero put US Gulf-Asia freight at $30-35 a barrel, and Breakwave estimated about $29 a barrel for US Gulf-China on 23 October.

Is the US port fee extension final?

No. USTR will decide after comments close on 30 October. If adopted, the pause runs from 10 November to 9 January 2027.

Can companies comment on China’s trade secret draft?

MOFCOM is taking comments by fax, email and post until 24 November. The text may still change.

Press coverage and sources

• https://www.investing.com/news/commodities-news/oil-eases-on-middle-east-diplomacy-hopes-saudi-attacks-keep-supply-worries-alive-4974185 (Reuters, oil settlement on 27 October)
• https://www.straitstimes.com/business/oil-tankers-sailing-us-china-route-are-commanding-us60-million-and-it-is-crushing-demand (Straits Times and Bloomberg, VLCC rates and Asian orders)
• https://www.breakwaveadvisors.com/insights/2026/10/23/vlcc-spot-rates-softer-but-far-from-soft (Breakwave Advisors, VLCC daily rates)
• https://oilprice.com/Energy/Crude-Oil/Record-Tanker-Rates-Cripple-US-Crude-Oil-Flows-to-Asia.html (OilPrice.com, Valero per-barrel freight)
• https://www.federalregister.gov/documents/2026/10/26/2026-21755/request-for-comments-on-further-suspension-of-section-301-action-chinas-targeting-of-the-maritime (Federal Register, USTR port fee proposal)
• https://tfs.mofcom.gov.cn/lfzqyj/art/2026/art_db6a858a9d4e4ec0a3dbeece659c324d.html (MOFCOM, trade secret draft for comment)
• https://natlawreview.com/article/chinas-ministry-commerce-releases-draft-provisions-targeting-foreign-entities-over (National Law Review, draft translation)