The cost of hiring an oil tanker for the industry's benchmark trade route exceeded $1 million per day for the first time, reaching $1.035 million per day, as the US-Iran conflict has led to a shortage of ships willing to traverse the Strait of Hormuz. This surge in freight rates has made some long-distance crude trades uneconomical and threatens to disrupt global oil flows.
In response to these high freight rates and the redrawing of trade routes due to the US-Iran war, shipowners have placed orders for more than twice as many supertankers in 2026 as in all of 2025. This $20 billion buying spree represents the largest in at least 25 years, with Signal Group reporting 217 Very Large Crude Carriers (VLCCs) ordered so far in 2026, up from 93 last year. Allied Shipbroking recorded 164 VLCC orders, an increase from 83.
Average spot earnings for VLCCs globally have jumped 40% in the past week, approaching $642,000 per day, according to Clarksons Research. Restrictions at the Strait of Hormuz and Bab Al Mandeb have forced tankers into longer journeys and complex ship-to-ship transfers, with some routes, such as Oman to South Korea, seeing gross earnings climb to about $845,000 per day. The US Gulf to China route has reached approximately $50 million per voyage, equivalent to $25 per barrel.
The Middle East conflict has tightened vessel supply, and the disruption is also spreading beyond crude oil, with increased shuttling activity for LPG and LNG carriers. About 15% of the global VLCC fleet is now in the Gulf of Oman, up from 10% in early July, due to longer waits for receiving vessels, effectively reducing available tanker capacity elsewhere. This ongoing disruption and elevated freight rates are creating a favorable earnings backdrop for Asian shipping companies, with a Goldman Sachs gauge of Asia shipping climbing about 17% this quarter.
