Shipowners have ordered more than twice as many tankers in 2024 compared to all of 2025, driven by Middle East conflict and pipeline closures that redirect crude shipments to longer transoceanic routes from the Americas. The $20 billion spending spree, the largest in 25 years, has pushed tanker lease rates to record highs of over $1 million daily.
The Breakwave Tanker Shipping ETF (BWET) has surged 3,600% year-to-date, becoming the best-performing U.S. fund, as geopolitical tensions in the Middle East and supply chain disruptions drive record shipping costs. The Strait of Hormuz crisis, Houthi control of Yemen's Mocka port, and broader factors like tariffs and drought have created an unprecedented shortage of oil tankers, allowing shipping companies to command premium rates.
VLCC spot rates have reached historic highs across all major shipping lanes, with the MEG-China index at $982,072 per day (double the past month) and rates potentially exceeding $1 million per day. The surge, driven by a chartering frenzy and geopolitical risks including Iranian attacks near the Strait of Hormuz, has created unprecedented market conditions that even industry veterans describe as seismic shifts in tanker shipping.