ClarkSea Index reaches all-time high, with “exceptional” cash position ahead
Driven by exceptionally elevated, disruption-driven rate environments in crude and LPG and supported by strong market conditions across container, car carrier and bulkers, cross-segment shipping market ‘barometer’ the ClarkSea Index has hit an all-time high (Q3: $46,384/day). Strong newbuild flow has continued to build orderbook backlog and asset prices in crude tankers have “surged”.
The record ClarkSea Index quarterly level tops the $44,222/day of Q2-2008 and is twice the 10-year trend, including the highest ever individual week ($66,000/day), reports Steve Gordon (pictured), Global Head of Clarksons Research.
Developments in the Middle East have been the principal driver, with shipping providing the logistical flexibility needed to move significantly increased volumes of oil 'to market'. The quarter has ended with an estimated 12m bpd of crude (pre-conflict 15m bpd, lows of <2m bpd in Q2 2026) transiting Hormuz, mainly by a ‘shuttling’ fleet from within the Middle East Gulf to the Gulf of Oman where oil is then transferred (via STS operations that take several days) to additional tankers for onward delivery to Asian markets.
There have also been changes in logistics at Yanbu, with flows to Asia largely re-routed to avoid the Houthi threat by using ‘shuttles’ to SUMED pipeline and then routing via Cape of Good Hope (attacks on pipeline to Yanbu now paused some of this flow) and more long-haul Brazilian exports (les s US volumes).
This combination of improved volumes plus additional ‘inefficiencies’ and distances has pushed VLCC earnings to exceptional levels (>$600,000/day, Q3 avg $277,995/day, some routes now over $1.6m/day) whilst demand for ships for the ‘shuttle’ operations also helped S&P prices surge to all-time highs (15 yr old VLCC price > newbuild, resale VLCC index at record $240m).
Operational risk is high, with over 100 vessel attacks now reported in the Gulf, c.10 in the Red Sea this year and >200 in the Black Sea. Aside from the Middle East many (geo-political) disruption themes (e.g. Russia sanctions, tariff uncertainty, Panama restrictions) continue and the global economy reported some resilient data points but also building risks.
The unprecedented strength in the VLCC market has filtered down into Suezmax (Q3 avg a record $228,262/day) and Aframax ($119,189/day). The product tanker market has been more modest by comparison but still averaged $31,157/day for MRs and firmed to $60,000/day by quarter end.
Clarksons Research says the short-term market outlook appears very strong, boosted by exceptional crude tanker markets, and developments in the Middle East will continue to dominate the agenda. Calibrating-long term future requirements for shipping demand is increasingly "tricky", with significant complexities against the evolving geopolitical backdrop. Fleet growth and orderbook in some sectors are now more material. An exceptional cash position with significant opportunity and risk ahead.