Oil Tanker Rates Top $1 Million a Day as Shipping Profits Soar

Shipping profits are surging because geopolitical detours and strong goods demand have simultaneously reduced effective vessel supply and increased cargo volumes, but the resulting boom is already encouraging the capacity growth that should reverse it.

• VLCC fixtures reached $1.01 million and reportedly $1.16 million per day, while Bloomberg Intelligence’s benchmark hit a record $907,635 on October 6; the Baltic Exchange Dirty Tanker Index stood at 7,444, more than six times its level a year earlier.
• Threats around Hormuz and Bab el-Mandeb are forcing cargoes onto smaller tankers, transfers in the Gulf of Oman and longer routes around Africa, keeping ships unavailable for additional voyages; port congestion alone is tying up about 12% of global container capacity.
• Demand is also supporting rates: the JPMorgan Global Manufacturing PMI rose to 53.0, its highest since February 2022, global goods trade posted its strongest first-half growth in 15 years apart from the post-Covid rebound, and AI-related goods generated 76% of first-quarter trade growth.
• Container markets are diverging: Shanghai-to-New York rates reached $10,428, up 78% since mid-June, while Shanghai-to-Rotterdam rates fell 31% since July; shipping a container from Shanghai to Los Angeles costs $7,835 versus only $791 on the return leg.
• Earnings reflect the windfall: Hapag-Lloyd now expects 2026 EBIT of $1.25 billion-$1.75 billion versus an initial range from a $1.3 billion loss to a $400 million profit, while Teekay Tankers reported second-quarter adjusted net income of $193.6 million; however, 198 VLCCs have been ordered this year versus 89 in 2025, and the tanker orderbook equals 37% of the existing fleet.
• The broader update adds that ZIM raised 2026 adjusted EBITDA guidance to $2.7 billion-$3.0 billion, while luxury shares remain pressured, with Hermès down more than 40% year to date and LVMH down about 40%.

Takeaway: Investors can remain exposed to shipping while cash flows are exceptional, but should monitor the orderbook and the reopening of Hormuz and the Red Sea because new deliveries and the release of rerouted vessels could drive a sharp capacity increase from 2027 onward.