GEOPOLITICS is the gift that keeps on giving for the tanker market. Crude and product tanker rates remain exceptionally profitable amid ongoing and coinciding threats to vessels in three trading areas: Strait of Hormuz, Red Sea and Black Sea.

This is the fourth quarter in a row that very large crude carrier rates have topped six figures per day — truly rarified air for the tanker trade.

Jon Chappell, transport analyst for Evercore ISI, wrote in a client note in January: “Since the beginning of 1990, VLCC rates have broken through the $100,000 per day threshold 23 separate times.

“In only seven of those occasions did rates remain above $100,000 per day for more than four weeks, and in only three of those periods did the duration last eight weeks or longer,” he said, noting that “the returns on vessels earning $100,000 per day are immense”.

Historical perspective on today’s boom

The 2026 tanker boom is exceeded by only one other: the 2004-2008 supercycle, which still holds top ranking due to its multiyear duration.

The 2000s boom saw two VLCC rate spikes over $200,000 per day, one in late 2004 and one in late 2007, and four additional stretches over $100,000 per day (the equivalent of $150,000 per day today).

Suezmaxes in the 2000s topped $140,000 per day twice and had four additional periods over $100,000 per day.

Worldscale rates during the 2000s boom were well beyond those in any other previous upcycle in tanker shipping history, according to data compiled by Martin Stopford, published in his textbook Maritime Economics.

In the 2000s, as is the case now, shipyard slots were filled with orders for multiple segments — dry bulk rates were even stronger in the 2000s than tanker rates — leaving on-the-water tanker tonnage to reap the rewards.

The unprecedented multiyear bull run in the 2000s was demand-driven. As China’s economy accelerated after it joined of the World Trade Organization, its oil consumption surged. Oil demand in other emerging economies also rose.

The current upcycles, in contrast to the 2000s supercycle, is driven by vessel supply disruptions, not higher demand.

Geopolitical disruptions in the Strait of Hormuz, Red Sea and Black Sea, combined with continued sanctions on Russia and Iran, have created trading inefficiencies and have extended routes, boosting tonne-miles even as total demand has declined.

Seaborne tanker cargo volume is below where it was before the upcycle began. According to Vortexa data, total seaborne volume (including crude and products) in July was down 4% year on year (y/y).

The International Energy Agency currently predicts that global oil demand in 2026 will be down 1m barrels per day versus 2025.

The closest historical comparisons to the current boom were in 1956-1957, following the Suez Crisis — which closed the canal and spawned fortunes for tanker owners like Aristotle Onassis — and the aftermath of the Six-Day War in 1967. Egypt closed the Suez Canal in 1967, and it didn’t reopen until 1975. Tanker rates spiked in 1967, 1970 and 1973.

After both of those tonne-mile-driven upcycle periods, route disruptions eased and tankers ordered amid the booms fed downturns thereafter. Newbuilds also exacerbated a multiyear slump after the demand-driven profit bonanza of the 2000s.

History is repeating itself vis-à-vis the tanker orderbook. Today’s enormous tanker orderbook is on par with levels during the 2000s supercycle in terms of tonnage, noted Maritime Strategies International managing director Adam Kent at Marine Money Week in June.

On one hand, demand-driven upcycles are generally viewed as more sustainable than supply-driven upcycles. Vessel supply-driven spikes are usually caused by geopolitical or weather disruptions that resolve and abruptly remove tonne-mile upside.

On the other hand, there are differences between cycles.

“The four most expensive words in the English language are: This time it’s different,” investor Sir John Templeton famously said, and yet, there is an argument that it’s different this time for tankers, because the world is shifting from a unipolar to a multipolar order.

“We are living through a key transition moment: the transition to a multipolar world,” said Jacob Shapiro, director of geopolitical analysis at The Bespoke Group, at Marine Money Week.

This is unique for tanker shipping. The last truly multipolar world was in the late 1800s, according to Shapiro, before the advent of tanker transport.

The ongoing parade of geopolitical disruptions may not be a coincidence, but a consequence of the unipolar-to-multipolar shift. If so, some supply-side disruptions may resolve and be replaced by other disruptions, keeping tonne-miles in relation to tanker cargo volume much higher than in the 2000s, at a time of free trade and efficient supply chains.

The 2020s boom could theoretically reach the top of the tanker history rankings if disruptions continue to prop up tonne-miles over the years ahead.

The counterargument is that if the Hormuz crisis and other disruptions last long enough, demand will fall too much, coinciding with rising tanker supply from newbuilds, offsetting geopolitical tonne-mile upside.

Tanker spot rate indexes

For now, tanker rates remain enormously profitable.

On Monday, the Baltic Exchange’s US Gulf-China VLCC index was at $123,408 per day, the West Africa-China VLCC index was at $113,605 per day, and the Oman-China VLCC index was at $136,727 per day.

Meanwhile, suezmax rates in the Black Sea continue to skyrocket due to the risk of Ukrainian attacks on non-Russian tonnage loading at the CPC terminal.

The Baltic Exchange’s Black Sea-Mediterranean suezmax index rose to $337,728 per day on Monday, only slightly below the all-time high of $344,198 per day reached on March 26 amid the initial panic caused by the Hormuz crisis.

This index has doubled over the past two weeks.

The West Africa-Europe suezmax index was at $91,079 per day on Monday, and the Guyana-North Europe suezmax index was at $98,118 per day.

In the aframax crude segment, Atlantic basin rates have surged over the past month.

“We’ve actually seen a couple of examples over the last couple of weeks where we are fixing our aframaxes out at higher rates than what we’re fixing our suezmaxes,” said Teekay Tankers chief executive Kenneth Hvid during last week’s quarterly call.

Even after a modest pullback in recent days, the Baltic’s Caribbean-US Gulf aframax index was at $114,211 per day on Monday, up 219% month on month.

The North Sea-Europe aframax index was at $104,571, up 190% m/m. The US Gulf-Europe aframax index was at $102,980 per day, up 220% m/m.

Product tanker time-charter-equivalent rates are not nearly as impressive as crude tanker TCE rates, yet they are still multiples above breakeven and up substantially y/y amid the normally slow summer season.

“I’ve been doing this for a long time. I’ve never seen a July or August market like this,” said Lars Dencker Nielsen, chief commercial officer of Scorpio Tankers, during a quarterly call last week. “This is not what you would consider to be a normal kind of summer lull.”

US Gulf rates for medium-range product tankers are being buoyed by the ban on Russian diesel exports and ongoing disruptions in the Middle East.

The Baltic Exchange’s US Gulf-Europe MR index was at $38,046 per day on Monday, up 39% m/m and 81% y/y. The US Gulf-Brazil index was at $40,987 per day, up 1% m/m and 51% y/y.

In the long-range product carrier segment, the Med-Asia LR2 index was at $33,568 per day on Monday, up 60% m/m and 335% y/y.