The value of older supertankers has surpassed that of new-build vessels for the first time on record, driven by soaring freight rates in the Middle East and strong demand from state-owned oil companies seeking to control their shipping capacity. Shipowners and brokers report a highly active market where deals are finalized within days, reflecting unprecedented conditions in the very large crude carrier (VLCC) sector.
Freight rates on the Middle East-to-Asia route for VLCCs, which transport about 2 million barrels of crude oil, have reached a record $1.2 million per day. This surge in charter prices has fueled a sharp rise in ship values, with vessels built five to 10 years ago now commanding prices as high as $150 million or more—exceeding the approximately $135 million average cost of new builds. Several recently sold ships have achieved prices well above historical norms, including a tanker owned by Greek billionaire George Prokopiou’s Dynacom, reportedly sold for $200 million with prompt delivery.
Industry experts describe the market as extraordinary. Alexander Saverys, CEO of Belgian shipping group CMB Tech, called the current environment "once-in-a-generation," noting that vessel age has become a secondary consideration in pricing, with speed of delivery emerging as a critical factor. Braemar, a shipbroker, observed that "vessel age has remarkably little bearing on prices today."
One key driver behind the boom is the shifting strategy of Middle Eastern national oil companies, which are increasingly investing in their own fleets rather than chartering vessels. This trend is aimed at securing greater control over crude exports from the Gulf, particularly amid geopolitical risks in chokepoints such as the Strait of Hormuz. Among active buyers are Kuwait’s national oil company and investors focused on shipping Iraqi crude. The United Arab Emirates’ Abu Dhabi National Oil Company (Adnoc) has reportedly acquired at least six supertankers in the past two months.
The attractiveness of ownership is underscored by extremely rapid payback periods. Saverys explained that with daily freight rates at record highs, buyers can recover substantial costs within months, effectively lowering the net cost of acquiring vessels.
Competition remains intense, with Gulf countries competing against major players such as South Korea’s Sinokor, which invested about $6 billion in tonnage earlier in the year. Commodity traders like Trafigura have also entered the market, acquiring supertankers to gain more control over their logistics and protect profit margins.
Rajesh Verma, deputy director of tanker shipping research at Drewry, highlighted the volatility of freight rates, noting that they fluctuate significantly on a daily basis. This uncertainty, coupled with the strong market, has prompted many shipowners to reconsider their fleet management strategies. While some have contemplated selling ships to capitalize on high prices, many are holding back in hopes of benefiting from ongoing elevated freight rates. This reluctance to sell has contributed to a scarcity of available vessels, further inflating asset values.
Despite warnings from some owners about potential market corrections in the event of a peace agreement that could ease tensions in the Gulf, legal and maritime consultants suggest that even a substantial drop in freight rates would leave earnings well above historical levels. George Macheras, head of global maritime at Watson Farley & Williams, noted that a downward correction to around €200,000 per day—still far higher than recent averages—would remain profitable for owners.
As the market continues to evolve, the tanker sector stands at a potential inflection point, balancing record profits with concerns about sustainability amid geopolitical and economic uncertainties.