See-sawing VLCC rates continued their extreme volatility on Thursday as tensions in the Middle East increased uncertainty in global oil markets.

Spot markets for the largest crude carriers rose from less than $5,000 per day 10 days ago to just below $40,000 per day on Tuesday, before falling back sharply, said shipbroker Braemar.

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The Baltic Exchange’s VLCC time charter equivalent tracker, which generally trends below the rates of brokers, fell by more than $7,000 on Thursday to $13,898 per day.

“Today’s heightened geopolitical risk, raised several notches after Hamas attacked Israel, has increased uncertainty in the oil markets,” said Braemar.

Some of the recent gains have been attributed to increased fixtures amid concerns that fighting between Hamas and Israel could expand to other key players in the region, disrupting oil trade flows.

But Clarksons reported on Thursday that rates for eco VLCCs fell more than 9% to $56,600 per day, reflecting slower chartering activity.

Increased tonnage supply for a restricted number of Middle East cargoes contributed to lower rates from the Middle East Gulf to Asia, Clarksons said. A few failed deals in the Atlantic also dampened sentiment.

Despite the fall, VLCCs have still seen increases of 110% on the month. Monthly spurts have also been recorded for aframaxes (131%) and suezmaxes (96%), it said.

Tanker rates in September and October declined to some of the lowest rates since August last year after Saudi Arabia led the way with production cuts that have hit the VLCC market the hardest.

VLCCs carry nearly 90% of Saudi Arabia’s seaborne crude oil exports. The country’s exports provide nearly one-third of all volumes carried by VLCCs.

Brent crude declined slightly on Thursday but remained above $90 per barrel after the US announced it was lifting restrictions on Venezuelan oil exports for six months after a deal was reached between President Nicolas Maduro and the opposition over elections to be held next year.

The former US administration of Donald Trump imposed sanctions in 2019 after Maduro declared victory in the 2018 elections despite widespread allegations of vote-rigging and fraud.

Clarksons said the move is likely to “positively affect” the tanker market by allowing mainstream tankers to move additional barrels, rather than shadow fleet vessels.

Rystad Energy expects Venezuela to lift crude production by 200,000 barrels per day over the next six months, most of which will go for export.

Braemar said the move would probably ease pressure on global oil prices and partly offset the cuts by Opec+ nations.

“We expect the extra Venezuelan oil will mostly flow to the US Gulf, with some additional barrels to Europe,” it said.

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