What is an oil tanker?

An oil tanker is a large ship designed to transport crude oil or refined petroleum products (petrol, diesel, jet fuel, heating oil) in bulk. Oil tankers are the primary means of transporting crude oil from producing regions to refineries, and refined products from refineries to import terminals worldwide. The global oil tanker fleet comprises approximately 8,000+ vessels of various sizes, transporting approximately 2.5 billion tonnes of oil per year — equivalent to roughly 60% of global crude oil trade (the remainder moves by pipeline). Oil tankers are classified by size, from small product tankers (10,000 DWT) to ultra-large crude carriers (ULCCs) exceeding 500,000 DWT.

What are Worldscale tanker rates?

Worldscale is a standard freight rate reference system used in the tanker market. The Worldscale Association publishes an annual 'flat rate' (WS 100) for each port-to-port route, calculated to provide a standard return at a reference voyage cost. Actual charter rates are then quoted as a percentage of the Worldscale flat rate — e.g., 'WS 150' means 150% of the standard rate. Worldscale rates are assessed daily by S&P Global (Platts) and Baltic Exchange for key crude and product tanker routes. High Worldscale rates (WS 200+) indicate tight tanker supply or high demand on a route; low rates (WS 50–80) indicate surplus capacity.

How do tanker freight rates affect fuel prices?

Tanker freight costs are a component of the delivered cost of crude oil and refined products. For crude oil, freight from the Arabian Gulf to Europe via VLCC is typically $1–4/barrel in normal markets — a small fraction of the crude price. When tanker rates spike (as in 2022, when Russian trade route changes caused tanker congestion), freight adds $5–10/barrel to specific routes. For refined products, MR tankers (clean product tankers) carrying diesel from Asia to Europe may add 3–6 ct/litre in freight cost. Tanker rate spikes are therefore most visible in refined fuel markets during supply disruptions, when they amplify wholesale fuel costs above what crude prices alone would imply.

Oil Tanker

The vessels that move crude oil from producing regions to refineries, and refined products from refineries to markets worldwide — a critical but often invisible part of the global fuel supply chain.

Definition

An oil tanker is a large seagoing vessel purpose-built to transport liquid petroleum cargoes — either crude oil (on crude tankers) or refined petroleum products such as petrol, diesel, jet fuel, and naphtha (on product tankers). Oil tankers are the primary means of international crude oil transport, moving approximately 2.5 billion tonnes of oil per year.

The tanker market is segmented by vessel size (from very large crude carriers down to small coastal product tankers) and by cargo type (crude vs clean products vs dirty products). Tanker freight rates fluctuate daily based on supply and demand for shipping capacity.

For how tanker rates interact with crude oil prices, see our crude oil glossary entry. For the product tanker market's role in fuel supply, see our refinery margin glossary entry.

Oil tanker size classification

Class	DWT (deadweight tonnes)	Cargo capacity (barrels)	Primary trade routes
ULCC (Ultra Large Crude Carrier)	320,000+	3+ million	Middle East–Asia; limited by draft to specific ports
VLCC (Very Large Crude Carrier)	200,000–320,000	2 million	Middle East–Asia; Middle East–Europe (via Cape); W Africa–Asia
Suezmax	120,000–200,000	~1 million	W Africa–Europe/US; North Sea; Black Sea–Med; maximum Suez Canal size
Aframax	80,000–120,000	~750,000	North Sea; Caribbean; Med; Baltic; Indonesia; shorter-haul routes
Panamax (crude)	55,000–80,000	~550,000	Maximum original Panama Canal size; Atlantic Basin trades
LR2 (Product)	75,000–115,000	~700,000	Long-range product: Middle East/Asia–Europe; diesel arbitrage
LR1 (Product)	45,000–75,000	~450,000	Long-range clean products; jet fuel; gasoil
MR (Medium Range Product)	25,000–45,000	~300,000	Intra-regional product trades; US refined product exports

Crude tanker vs product tanker

The tanker market is divided into two main categories:

Crude tankers (dirty): VLCC, Suezmax, Aframax — transport unrefined crude oil from loading terminals at oilfields to refineries. Called "dirty" because crude is a heavy, dark liquid that coats tank walls
Product tankers (clean and dirty): MR, LR1, LR2 — transport refined products (petrol, diesel, jet fuel, naphtha, chemicals). "Clean" product tankers must have epoxy-coated tanks to prevent contamination; once used for crude or dirty products, they require expensive cleaning to return to clean status

Crude tanker rates and product tanker rates can diverge significantly — for example, if refinery output increases and more product needs to be shipped while crude trade routes shorten, product tanker rates may rise while crude rates weaken.

Worldscale tanker freight rates

The Worldscale rate system is the tanker market's standard for expressing voyage freight rates:

WS 100 = the Worldscale "flat rate" for a specific route, calculated annually to provide a standard operating return
Actual market rates are expressed as WS multiples (e.g., WS 150 = 150% of the flat rate)
Key rate benchmarks: TD3C (VLCC, Arab Gulf–China), TD7 (Aframax, North Sea), TC2 (MR, NWE–USAC product)
Rates assessed daily by Baltic Exchange (for benchmarks) and Platts/OPIS (for specific route assessments)

Route	Vessel class	Normal range (WS)	Spike range (WS)
Arab Gulf → China (TD3C)	VLCC	WS 50–80	WS 150–250
Arab Gulf → Northwest Europe (TD1)	VLCC	WS 35–55	WS 100–180
West Africa → China (TD15)	VLCC	WS 55–85	WS 150–230
North Sea (TD7)	Aframax	WS 90–130	WS 250–400
NWE → USAC clean products (TC2)	MR	WS 120–200	WS 350–600

2022 tanker market disruption
Russia's invasion of Ukraine in February 2022 caused major tanker market disruption. Western sanctions on Russian crude and products redirected trade flows: Russian oil (previously shipping on short routes to Europe) was redirected to longer routes to India and China. European refineries simultaneously had to source crude from longer distances (West Africa, Middle East). This "route lengthening" absorbed tanker capacity, driving VLCC rates to WS 150–300 and Aframax rates to WS 400+ in late 2022. The freight component added $5–10/barrel to some route costs — a meaningful addition to already elevated crude prices. For the 2022 market context, see our refinery margin entry.

Key crude tanker routes and their fuel market implications

Route	Volume (mb/d, approx.)	Strategic chokepoints
Arabian Gulf → Asia (China, India, Japan, Korea)	~20	Strait of Hormuz (~20 mb/d; most critical chokepoint)
West Africa → Asia	~4	Cape of Good Hope (no canal constraint)
Arabian Gulf → Europe	~3–4	Suez Canal; Bab el-Mandeb
Russia (Baltic/Black Sea) → Asia	~3–4 (post-2022)	Turkish Straits (Bosphorus/Dardanelles)
Americas → Europe/Asia	~6	Panama Canal

For how shipping fuel costs (bunker fuel) relate to the tanker market, see our heavy fuel oil glossary entry. For the wider supply chain from crude production to pump, see our petrol price per litre explained guide.

Frequently asked questions

What is an oil tanker? An oil tanker is a large ship designed to carry crude oil or refined petroleum products in bulk. The global fleet transports ~2.5 billion tonnes of oil per year. Tankers range from VLCCs (2 million barrel crude carriers on Middle East–Asia routes) to MR product tankers (300,000 barrel refined product vessels). Crude tankers (dirty) carry crude oil; product tankers (clean) carry refined fuels including petrol, diesel, and jet fuel.: An oil tanker is a large ship designed to carry crude oil or refined petroleum products in bulk. The global fleet transports ~2.5 billion tonnes of oil per year. Tankers range from VLCCs (2 million barrel crude carriers on Middle East–Asia routes) to MR product tankers (300,000 barrel refined product vessels). Crude tankers (dirty) carry crude oil; product tankers (clean) carry refined fuels including petrol, diesel, and jet fuel.
What are Worldscale tanker rates? Worldscale is the standard tanker freight rate reference system. WS 100 is the flat rate for each route (calculated annually). Actual market rates are quoted as a percentage: WS 150 = 150% of the standard flat rate. Key benchmarks: TD3C (VLCC, Arab Gulf–China), TD7 (Aframax, North Sea), TC2 (MR product, NWE–USAC). High WS rates signal tight tanker supply; low rates signal surplus capacity.: Worldscale is the standard tanker freight rate reference system. WS 100 is the flat rate for each route (calculated annually). Actual market rates are quoted as a percentage: WS 150 = 150% of the standard flat rate. Key benchmarks: TD3C (VLCC, Arab Gulf–China), TD7 (Aframax, North Sea), TC2 (MR product, NWE–USAC). High WS rates signal tight tanker supply; low rates signal surplus capacity.
How do tanker freight rates affect fuel prices? In normal markets, tanker freight adds $1–4/barrel (~1–3 ct/litre) to crude delivered costs — a small fraction of fuel prices. During tanker market spikes (such as 2022 post-Russia trade disruptions), freight added $5–10/barrel on key routes, amplifying fuel cost increases. Product tanker rates (MR, LR2) affect the cost of diesel and petrol imports — a key variable for countries that import refined fuels rather than crude.: In normal markets, tanker freight adds $1–4/barrel (~1–3 ct/litre) to crude delivered costs — a small fraction of fuel prices. During tanker market spikes (such as 2022 post-Russia trade disruptions), freight added $5–10/barrel on key routes, amplifying fuel cost increases. Product tanker rates (MR, LR2) affect the cost of diesel and petrol imports — a key variable for countries that import refined fuels rather than crude.