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March 25, 2025 – In one of the most paradoxical moments in modern tanker shipping, owners of modern vessels are systematically turning down offers that would have seemed unthinkable just a year ago. Secondhand prices for five-year-old very large crude carriers (VLCCs) have surged past $120 million, yet the number of transactions remains unusually low. As freight markets hit fresh records, the question is no longer “how high can prices go?” but rather “why aren’t owners selling?”
The answer lies in a combination of forward-looking charter commitments, rising replacement costs, and a structural shift in how owners value their ships. Unlike the record-breaking sales volume seen during the 2020–2022 pandemic boom, today’s sellers are far more reluctant to part with their tonnage.
The crude tanker market has been on a remarkable run since late 2024. Geopolitical disruptions, longer voyage distances due to rerouting from the Red Sea, and steady demand from refineries have pushed spot rates for VLCCs above $80,000 per day on several key routes. That is a level not seen since the post-Ukraine-war spike of 2022.
For a modern eco-VLCC delivering in 2020, operating costs sit around $12,000 per day. At current spot rates, the owner can earn net revenue of over $60,000 per day, equating to roughly $20 million per year. Selling that same vessel for $120 million would yield a capital gain, but the owner would lose the ability to generate that cash flow for the next 10–15 years.
“Selling a modern tanker in this market means you’re betting on a rapid decline in rates,” said James Spencer, head of tanker research at Maritime Strategies International (MSI). “But the forward curve suggests rates will stay elevated into 2027. Owners are looking at the total return, not just the sale price.”
Data from Clarksons Research shows that secondhand prices for five-year-old VLCCs have risen 35% year-on-year to $125 million in March 2025. That is above the newbuilding price of an equivalent vessel, which stands at around $128 million at Asian yards. The rare premium on secondhand tonnage implies that buyers are willing to pay more for immediate availability.
Yet the number of VLCC sales in the first quarter of 2025 fell by 60% compared to the same period in 2024. Brokers report that many owners have simply withdrawn their vessels from the market, or demand prices that are considered unrealistic. “We’ve had buyers willing to pay $130 million for a 2021-built VLCC, and the owner still said no,” said a senior broker at a major Greek shipbroking house. “They want $140 million, and they’re not in a hurry.”
One reason is the ability to lock in forward chartering revenue. Many owners have entered into time charters for 12–24 months at rates of $50,000–$60,000 per day, effectively de-risking the near-term cash flow. The spot market is so strong that even owners who prefer spot trading are reluctant to sell, as they can simply wait for a better offer.
Another key driver is the difficulty of ordering new ships. Global shipyard capacity is tight, with delivery slots for VLCCs pushed to 2028 or later. Newbuilding prices have risen by 20% since 2023 due to inflation in steel and labor costs. A replacement ship would cost more than $130 million and arrive only after three years.
“If an owner sells a modern tanker today, they can’t replace it at a similar price for at least two years,” said Nikos Tsakos, CEO of Tsakos Energy Navigation. “The opportunity cost of not having a ship during the next boom is enormous. That’s why we are seeing owners hold on to even older tonnage.”
This structural shortage of new supply is reinforcing the secondhand market paradox. Buyers are frustrated, but sellers are in the driver’s seat. The only transactions that are happening involve distressed sales, fleet renewals by owners exiting the market, or trades involving older non-eco vessels where the price gap is smaller.
Greek owners, who control the largest fleet of modern tankers, are particularly reluctant to sell. They tend to operate long-term, with a focus on maximizing cash flow through the cycle. Chinese owners, on the other hand, have been more active in both buying and selling, but even they are pulling back.
“Chinese buyers accounted for a large share of secondhand tanker purchases in 2023–2024, but now they are also becoming sellers at the right price,” said a Shanghai-based broker. “However, they are not rushing. The market is too good to churn the fleet.”
The only active sellers are those with specific financial needs, such as reducing leverage or exiting shipping altogether. For example, the sale of a 2019-built Suezmax from a Japanese owner to a Swiss trader was completed in February at $95 million, a record for that class. But such deals are rare.
The reluctance of owners to sell is creating a structural shortage of modern tonnage in the secondhand market, which in turn supports charter rates. Eventually, it could lead to a spike in newbuilding orders, but that will take years to materialize. The demand for crude oil transportation remains firm, with IEA forecasts showing global oil trade growing by 1.5% in 2025.
Analysts at Fearnleys expect that freight rates will remain elevated through the third quarter of 2025, though some softening is possible in the second half as vessel supply increases slightly. However, the supply of modern tankers will remain constrained, as the orderbook as a percentage of the fleet is only 8% – the lowest in over a decade.
“The owners are making a rational bet,” said Spencer. “In a market where the day rate is high and the replacement cycle is long, the value of a ship is not just its current price, but the stream of future earnings. Right now, that stream is worth more than any check a buyer can write.”
The current standoff between buyers and sellers in the modern tanker market represents a fundamental shift in asset management. In the past, owners would sell into strength to lock in profits.
