Over the last ten years, VLCC spot rates have been extremely volatile with full-on booms in 2004 and 2007/2008. The strengthening of the market in 2002 through 2004 leading to the 2004 boom can be explained simply by ton-mile demand growing faster than available ton-mile supply. But this is not the case for the 2007/2008 boom. The paper argues that these rates spikes were caused by increases in…