A VLCC booking from the US to China now runs about $80 million — more than the $74 million sticker price of a standard SpaceX Falcon 9 launch, shipbroker Gibson said this week. The same voyage would have purchased a near-identical tanker outright earlier in 2025.

That comparison, plucked from a market where freight now eats roughly half the value of every cargo, frames a tanker shortage that brokers say has no modern precedent.

How tight is the market?

Adjusted for inflation, supertanker rates are the highest since VLCCs entered service in the 1960s, brokerage SSY said — above the 1980s Tanker War spike, when Iran and Iraq attacked commercial shipping in the Persian Gulf. Vitol Group CEO Russell Hardy told a conference this week: "There's really not quite enough shipping to go around. We've had pretty parabolic pricing."

The squeeze follows the disruption caused by the Iran war and its aftermath in the Gulf. A commercial vessel was struck by a projectile in the Persian Gulf on Friday, the second reported attack inside the Gulf in three days, sparking an onboard fire.

Why are voyage lengths ballooning?

Middle Eastern producers now shuttle crude from Hormuz onto other ships rather than run loaded tankers through the strait, adding roughly a week per voyage and stretching the effective global fleet. Industry executives put Hormuz throughput at about 80% of pre-war levels and recovering.

When transits collapsed earlier, tankers ballasted for weeks from the Middle East to other regions. Now that Gulf volumes are coming back, the same vessels must reposition again. Iranian exports to China have effectively paused, pushing Chinese buyers into the mainstream market for replacement barrels. Some owners are routing around Africa to avoid Houthi exposure, adding thousands of miles per leg.

The result is a fleet that is busy without delivering more crude. Lauren Gallinari, head of business intelligence at shipbroker MJLF & Associates, said: "We've certainly seen extraordinary freight markets before, but the speed, magnitude and breadth of this rally are remarkable."

What does it cost shippers?

A US-to-China booking agreed at the latest levels equates to a transport cost of about $41 a barrel, against an average of $4.50 on the same lane last year. With West Texas Intermediate near $91 a barrel on Friday, freight now absorbs roughly 45% of the crude's value.

Suezmax daily earnings have jumped past $680,000, about five times their level at the start of the month. Liquefied petroleum gas carriers, hauling propane and similar gases, are charging near records — rates have more than tripled since the end of last year.

Hedge fund manager Tor Svelland, founder of Svelland Capital, said: "The market is going from strength to strength. At a certain point, refineries can easily take a breather. When you go from 5% of the value of a cargo to 50%, trade flows will stop."

Who benefits?

Tanker owners are collecting windfall profits. Second-hand prices for an oil tanker hit $240 million, the highest on record and more than 60% above the level at the end of last year, according to Clarkson Research Services, a unit of the world's largest shipbroker. The combined market value of the world's largest listed shipping companies has climbed past $70 billion, also a record.

What is the knock-on for refiners and producers?

High freight is starting to pinch downstream margins. Shell Plc said in a trading update this week that some third-quarter results will reflect "an increase in variable components of long-term shipping leases in the current macro environment." European refiner Repsol reported Q3 margins of $36 a barrel; RBC analysts put October at roughly $15, partly on tanker costs.

West African exporters, dependent on Chinese refiners about 10,000 miles away, are discounting crude to keep it competitive. Cargoes that would normally move on a VLCC are being split across two Suezmax ships, and producers in Iraq, the UAE and Kuwait have all been in the market to buy tankers or lock in long-term hires.

Clarksons Securities analysts wrote: "With little additional capacity available, freight becomes increasingly dependent on what charterers can afford to pay."

How much further can it run?

That is the question hanging over every trading desk from Houston to Geneva. If freight keeps climbing, refiners will respond by cutting crude throughput, tightening product supply and eventually pulling enough cargoes to slow the rally. Until then, every extra barrel that re-enters Hormuz adds another voyage to a fleet that already cannot keep up.