VLCC (the 270,000 deadweight ton crude tanker class) spot rates have held firm into the third week of April. The TD3C route, which prices a VLCC load out of the Middle East Gulf bound for China, printed in the mid five figures per day this week. The TD22 route, which covers US Gulf loadings to China, held a steady premium. That is a clean setup heading into first quarter earnings season.
The big anchor is already on the board. DHT Holdings (ticker DHT) reported a Q1 2026 fleet average TCE (time charter equivalent, the daily rate a tanker earns after voyage costs) of $91,700 per day. That number sets a high bar for the rest of the group. Frontline (ticker FRO), Teekay Tankers (ticker TNK), and International Seaways (ticker INSW) all report inside the next three weeks.
This post walks through the current rate deck, the read across size classes, and what the April 18 levels mean for Q2 guidance language.
1. TD3C and TD22: The VLCC Middle East and US Gulf Snapshot
The TD3C Middle East to China benchmark is the single most watched crude tanker spot rate in the market. It prices a 270,000 ton crude load, the typical VLCC stem size, out of the Arabian Gulf to the east. This week it sits in the mid $70,000s per day range on a modern eco VLCC round trip equivalent basis. That is a touch lower than the Q1 weekly average, but not by much.
The TD22 US Gulf to China benchmark is the longer haul cousin. It prices a VLCC load out of the US Gulf Coast into east Asia. Every barrel on that route ties up the ship for roughly 85 days round trip. The comparable figure for TD3C is about 40 days. Current TD22 is printing near $55,000 per day equivalent after bunker adjustments. That spread between TD3C and TD22 is narrow right now, and narrow is a quiet signal that owners are not desperate to lift cargo on either side.
Put those two numbers next to the DHT Q1 headline. DHT booked $91,700 fleet average for Q1. The April 18 TD3C read sits below that blended number. The reason is easy to see. First quarter winter demand pulled rates into the six figures per day for stretches of January and February. April is the shoulder. A step down from Q1 peak to Q2 baseline is normal.
The April 18 rate deck is not a Q1 replay, and it is not supposed to be.
2. Suezmax and Aframax: Where the Surprise Is
The smaller size classes are telling a different story. Suezmax (a tanker sized to transit the Suez canal fully loaded, roughly 120,000 to 200,000 deadweight ton) rates have held in the low $50,000s per day this week. Aframax (a tanker class around 80,000 to 120,000 deadweight ton, named after the Average Freight Rate Assessment system) rates broke higher in the week ending April 12. TD25, the US Gulf to northwest Europe Aframax route, jumped into the high $60,000s per day. That puts Aframax day rates within striking distance of VLCC rates for the first time in months.
Why does this matter? Teekay Tankers (ticker TNK) runs a Suezmax and Aframax heavy fleet. International Seaways (ticker INSW) carries Aframax and LR1 (Long Range 1 product tanker) tonnage inside its crude book. Hafnia (ticker HAFN) sits on the product side with a mixed LR and MR (Medium Range product tanker) fleet, so it reads off the Aframax print through product market spillover. Each one of those three names has direct operating leverage to the Aframax tape.
Suezmax rates are the bridge in the middle. The TD20 West Africa to northwest Europe Suezmax benchmark held in the low $50,000s per day this week. Modest, not thrilling. But Suezmax has one structural tailwind working in its favor. Russia sanctions have pushed more crude into Suezmax parcel sizes on longer ton mile routes. That is a slow drip, not a spike, but it does set a rate floor.
The read across is simple. If a shipowner runs a Suezmax and Aframax heavy fleet, the April tape is stronger than the VLCC pure play tape. That is why TNK and INSW deserve a second look on any Q1 earnings dip.
3. Ton Mile, Fleet Growth, and the Supply Side
Spot rates do not exist in a vacuum. Two numbers drive the medium term setup.
Ton mile demand is the first. Ton miles measure tons of cargo multiplied by miles sailed. OPEC plus (the OPEC and allied producers grouping) rolled back some voluntary cuts this quarter. That adds barrels to VLCC routes. The US is still producing near record crude volumes, which feeds TD22 loadings out of the Gulf Coast. Both data points are positive for ton mile demand.
Fleet growth is the second. The global VLCC orderbook as a percentage of the sailing fleet sits in the mid single digits. That is historically low. Few new VLCCs will hit the water this year or next. Scrapping is still running at a trickle. Net fleet growth on VLCC is flat through 2027. Supply discipline is the quiet anchor under the rate deck.
Flat supply into modest demand growth is the cleanest shipping chart on the board right now.
4. Q1 Earnings Cadence: Who Reports and What to Watch
The Q1 2026 earnings cadence has already started. DHT delivered the $91,700 TCE headline. Frontline reports next, and the Street is modeling a similar range given Frontline’s VLCC heavy book. Scorpio Tankers (ticker STNG) reports on the product side. Its read on the Atlantic basin freight trade will matter for anyone modeling tanker on tanker spread.
Teekay Tankers reports into May. The street estimate range for Q1 TNK TCE has been drifting higher since the Aframax breakout. International Seaways reports in the same window. Both names will likely print Q1 TCE in the low to mid $50,000s per day on a blended basis.
The trick for Q2 is not the reported number. It is the guide. Every earnings call will include some version of this question: what percentage of Q2 days are already booked, and at what rate?
Here is the useful framing. If operators tell you they have 40 to 60 percent of Q2 VLCC days locked in around $50,000 per day, Q2 TCE will print in the high $40,000s. If they tell you 30 to 40 percent locked in around $60,000 per day, the guide will imply low to mid $50,000s. The current April 18 tape sits right inside that second bucket.
5. What the April 18 Rate Deck Means for the Group
Section five, part one. VLCC pure plays. DHT and FRO sit here. Q1 was the peak. Q2 will step down. A 20 to 25 percent Q2 TCE decline from Q1 on the VLCC fleet is in the base case. Both names still generate meaningful free cash at current rates given low debt and strong fleet age profiles.
Section five, part two. Aframax and Suezmax tilt. TNK and INSW sit here. The Aframax breakout of mid April gives both names a positive Q2 mix shift. That is the upside point for the group.
Section five, part three. Product tanker read through. STNG and HAFN sit here. Product tanker rates are running their own cycle, but any crude rate firming pulls swing tonnage back into crude trades. That trims product supply and supports MR and LR rates. Indirectly, a firm VLCC tape is good news for STNG and HAFN.
Section five, part four. Hybrid names. INSW again, and to a lesser extent Teekay parent Teekay Corporation. The hybrid crude and product fleet gives INSW a natural straddle. Whichever market runs hotter, INSW captures a piece of it.
6. The Bottom Line Heading Into Q1 Season
The April 18 rate deck is coherent. Q1 peak, Q2 step down, fleet supply flat, ton mile demand slowly up. The DHT print already told you what Q1 looks like. The April tape is now telling you what Q2 will look like.
Pair both together and the Q1 earnings calls should deliver solid trailing numbers and slightly softer forward guide language. For traders, that is a sell the rumor, buy the guide setup. For long term holders, free cash generation is still running at levels that support the capital return programs already announced across the group.
Our editorial take is Monitor. The group is not cheap on spot, but it is far from stretched on through cycle. If Aframax holds above $60,000 per day through the end of April, the Q2 setup shifts to Bullish.
Disclosure: this post is for informational purposes and is not investment advice.