A b s t r a c t This article focuses on the issue of market concentration in the VLCC tanker sector and its significance for freight rates during 1993(1)-2010(12). It explores the nature of changes in freight rate volatility along business cycles and finds that freight rate volatility generally increases during both upswings and downswings of the market, but becomes evidently more intense during market upswings. Industrial concentration in the VLCC sector is measured via application of concentration measures that are well founded in the literature. The empirical results obtained reveal a significant increase in market concentration post-1993. Subsequently, the effect of changes in market structure upon the formation and volatility of VLCC spot and time charter freight rates is investigated. We substantiate a positive relationship between spot freight rates and market concentration over the period examined, concluding that expectations regarding the future course of concentration are critical for forecasting the direction of freight rates in the future.