I keep coming back to the same number after my last piece on Frontline ($FRO). Not the $76,900 day rate. The other one.
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Twenty-eight.
The number that keeps nagging at me is not $76,900. It is 28.
Seven VLCCs locked into one-year charters. Roughly 28 others sitting open, riding whatever the market hands them over the coming months. That split is worth a closer look because those 28 ships are either the best thing happening at Frontline right now, or a quiet renewal problem coming due in early 2027. Depends on how you want to read it.
Barstad Built This Gap on Purpose
When Frontline fixed those seven charters in January, South Korea’s Sinokor was on the other side of the trade. CEO Lars Barstad called the $76,900 rates “charter-out levels not seen for decades” and that was fair. But he said something else in the same conversation. Frontline was staying largely spot exposed after the deals. That was the plan, not a side effect.
Barstad keeps a standing rule about this. Time charter coverage stays below 30% of the fleet. Seven ships out of 42 VLCCs lands around 17%. The rest was always going to run open. His pitch to investors has always been pretty direct: you buy Frontline stock to get spot tanker returns without buying the ships yourself.
So those 28 open VLCCs are not an oversight. They are the whole point.
And Then the Market Showed Up
At the Q4 earnings call on February 27th, Frontline had already booked 92% of available VLCC days for 2026 at $107,100 per day. Worth repeating. Not $76,900. The market had already moved to $107,100 before the Strait situation escalated.
Then Hormuz effectively closed.
Spot rates on the Middle East to China route hit $170,000 per day in late February. By early April they were at $356,000. Some fixtures reportedly cleared $500,000 when commercial transits through Hormuz collapsed from around 138 daily vessel crossings down to single digits. More than 77 VLCCs were physically trapped inside the Persian Gulf, which pulled a big chunk of available tonnage off the global market in a very short window.
Rerouting around the Cape of Good Hope adds 10 to 14 extra days per voyage. Fewer completed trips per year per ship means tighter effective supply worldwide, even without a single extra barrel moving. That math keeps working in Frontline’s favor as long as those ships stay open.
Those 28 vessels are not a problem right now. They are the engine.
So What Is the Actual Risk Here
It is not today. It is Q1 2027.
Those seven Sinokor charters expire between late January and April of next year. That is a real renewal cliff. The bet Barstad is making is that rates stay strong enough that renewals happen at good numbers, or that the spot earnings between now and then make the whole conversation irrelevant.
If Hormuz reopens and Iran’s $2M per vessel toll demands get resolved before those contracts roll, the math flips fast. Seventy-seven trapped VLCCs come back into service, Cape reroutes disappear, and the market deflates. That is the real bear case. Not just that 28 ships are exposed, but that Frontline will be renewing its whole time charter book into a market that nobody can call right now.
The other side of that argument is fleet supply discipline, nine new ECO VLCC newbuilds arriving from Q3 2026 through mid-2027, and Barstad continuing to pick his spots well. He looked early when he fixed at $76,900. He was not early. He was watching the gauges.
Where the SteamGauge Sits Today
Pressure is high. Probably too high to call this a clean entry point right now. But I am not flagging those 28 open ships as a problem while Cape rerouting economics are still running and Q2 earnings have not printed yet.
This is either a rate story that keeps building, or a geopolitical resolution that lets air out of the market before the contracts can catch up. Both things happen eventually in shipping. The only real question is which one happens first.
What is your read?
Always my own thoughts, never financial advice. Do your own digging. Emily @ txzen.com
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For context on how another major VLCC operator positioned itself in the same rate environment, DHT Holdings: The Pure-Play VLCC Stock That Pays You to Wait offers a useful comparison. The April P/NAV scorecard puts current valuations across all eight watchlist names in one place.