Benchmark rates for oil-carrying supertankers have collapsed as OPEC+ follows through on a surprise vow to slash supply to shore up prices, reducing volumes shipped across the world’s oceans.

Vessels hauling two million barrels of crude from the Middle East to China are earning a little over $14,000, down from more than $97,000 on March 20, 2023, according to Baltic Exchange data. That’s dented the share prices of listed owners including DHT Holdings Inc. and Frontline PLC.  

The drop marks a change in fortunes for the market. For almost a year, tanker rates had been buoyed by shipments having to sail further as buyers seek replacements for Russian oil. That — coupled with releases from U.S. oil reserves — had sent earnings above $100,000 a day for the first time since 2020.

But on April 2, OPEC+ shocked the oil market by announcing a round of large supply cuts, lowering the number of cargoes for ships to transport. Sentiment around crude has also been hit by concerns about global growth and, after a surge in Chinese imports, there’s also been a rising number of vessels sailing back to the Middle East, boosting the supply of ships for hire.

“OPEC+ cuts have culled the cargo count,” said Anoop Singh, global head of shipping research at Oil Brokerage Ltd. “But equally the West is weak. Chinese demand is key, because if China is buying, then even if OPEC+ cut, China will look for other crudes and support markets.”

The pull-back will likely offer some relief to the oil market, where long-haul arbitrage cargoes have had more difficulty due to elevated freight rates. Lower shipping costs generally make it easier to move shipments across the globe.